You should consider getting liability insurance even if you are not required to do so by law because the benefits far outweigh any risk. The area you do business in will determine any legal insurance requirements. Many general contractors require it if you want to bid on a job as a subcontractor, and your prospective clients may also ask for proof of insurance.
Tradesman public liability insurance offers protection from financial claims if anyone other than you or one of your employees is injured as a result of or in connection with your work. Even if they are covered by other insurance, their insurer may bring a claim against you to recover damages. The workmanship of you and your employees may be first rate, but you could be named as a defendant due to circumstances beyond your control. Your insurance company would defend you and pay the damages if a judgment were made against you.
Self-employed tradesmen may only be required to carry tradesman public liability insurance under certain conditions. For example, contractors who work on public buildings or who have employees are usually required to have liability insurance. If you are a subcontractor on a larger project, the general contractor’s own insurance policy may require you to have your own policy to lessen their exposure to legal liability.
The nature of your trade will determine the necessity and costs of the insurance. Some trades, such as handyman services or painting services have lower risks. Others, such as electrical services, gas repair services or those services operating in public or high traffic areas have higher risks. The coverage amounts and the premiums are calculated according to those risks.
The policy may stand alone or could be included in umbrella coverage. A general business policy package may include tradesman public liability insurance along with workman’s compensation, vehicle, and health insurance if you have employees. You may also choose to include coverage for your tools, equipment, or workshop.
Your choice of tradesman public liability insurance should be determined by more than just the cost of the policy. Evaluating your potential liability if someone has claim against you and taking your own ability to meet deductible amounts and exclusions into account will help you to find the best value. Making sure you understand what the policy actually covers is very important, and consulting with a legal and or financial advisor could be very helpful.
Even if you have a one man operation, it may be too much of a risk to not carry tradesman public liability insurance. A single successful claim can result in bankruptcy or seizure of assets. Even if a claim is unsuccessful, the legal costs of defending yourself can have the same effect. Tradesman public liability insurance is an investment that will help ensure that you can practice your trade with peace of mind.
