Tradesman Insurance Calculator

What cover does a tradesman actually need?

“Tradesman insurance” is not one policy – it is a bundle you build from a few separate covers, and buying the wrong mix is expensive in both directions. This tool asks five quick questions and tells you which covers apply to you, the sensible limits, and which one is a legal requirement rather than an option. It is built for UK sole traders and small building firms – electricians, plumbers, builders, roofers, carpenters and decorators – who want to know what to ask a broker for. It does not quote a premium; it sizes the cover.

The four covers, in plain terms

• Public liability – pays if you injure a member of the public or damage a client’s property. Not required by law, but nearly every client, main contractor and local authority demands it before you set foot on site. Common limits are £1m, £2m, £5m and £10m.
• Employers’ liability – the one cover the law forces on you. The moment you employ anyone, including labour-only subcontractors, the Employers’ Liability (Compulsory Insurance) Act 1969 requires at least £5 million of cover, and the HSE can fine you up to £2,500 for each day you go without it.
• Tools & equipment – replaces stolen or damaged tools. Insure the full replacement value on a new-for-old basis and check it covers tools left in a locked van overnight.
• Professional indemnity – only needed if you design, advise or specify as well as fit. It covers claims that your advice was wrong, which public liability never does.

Worked example

A plumber works with one labour-only mate, does mostly domestic jobs but has one commercial contract that demands £5 million public liability, and carries about £4,000 of tools. The calculator returns: public liability at £5m (set by the commercial contract, not the average job); employers’ liability legally required at a £5m minimum because of the mate; tools cover with a £4,000 sum insured, new-for-old and including overnight van theft; and no professional indemnity, because they fit rather than design. That is the exact shopping list to hand a broker.

Frequently asked questions

What insurance does a tradesman legally need?

The only legally compulsory cover is employers’ liability insurance, required as soon as you employ anyone – including labour-only subcontractors. Public liability is not required by law but is demanded by almost every commercial client, main contractor and local authority before they will let you on site.

How much public liability cover does a tradesman need?

Most sole-trader tradespeople carry £1 million or £2 million of public liability. Commercial, public-sector and local-authority contracts frequently insist on £5 million, and some large or rail/utility contracts require £10 million. Match the limit to your biggest contract requirement rather than your average job.

Is employers’ liability insurance compulsory?

Yes. Under the Employers’ Liability (Compulsory Insurance) Act 1969 you must hold at least £5 million of employers’ liability cover if you employ anyone, and most policies provide £10 million as standard. The Health and Safety Executive can fine you up to £2,500 for every day you are uninsured.

Does tradesman insurance cover my tools?

Tools and equipment cover is an optional add-on, not automatic. Insure the full replacement value, choose new-for-old rather than indemnity where possible, and check the policy covers tools away from your premises and left in a locked van overnight, as van theft is a common exclusion.

Do I need professional indemnity as a tradesman?

You need professional indemnity if you give design, advice or specification as well as doing the physical work – for example design-and-build, kitchen or bathroom design, or specifying materials. It covers claims that your advice or design was wrong, which public liability does not.

Are labour-only subcontractors covered for employers’ liability?

Usually yes – labour-only subcontractors who work under your direction normally count as employees for employers’ liability, so they must be inside your headcount. Bona fide subcontractors who supply their own materials and carry their own insurance are treated differently. Confirm each worker’s status with your insurer.

Source: employers’ liability rules and the £2,500-a-day penalty from GOV.UK – Employers’ liability insurance (Employers’ Liability (Compulsory Insurance) Act 1969). Public liability and tools limits reflect standard UK trade-insurance conventions.