What construction insurance do I need if I am self-employed?
If you work in the construction industry, you will need to consider which insurances you want even if you are self-employed or a sole trader. It’s important to get the right kind of insurance for your circumstances, which means understanding the available options.
Do I need builders’ insurance if I’m self-employed?
It doesn’t matter that you’re self-employed; you should consider builders’ insurance.
What is included in your builders’ insurance may vary between insurers. Make sure you understand if it includes public liability insurance and employers’ liability insurance if you employ anyone. However, there may be other types of insurance you need as well.
Why do I need public liability insurance if I’m self-employed?
Public liability insurance is designed to protect your business in the event something you do causes injury to a third party or damages property. It covers a range of situations that may arise between you, your work, and a member of the public or client.
It’s not a legal requirement to have public liability insurance, but you may find that many clients insist you have it as a term of their contract with you.
Why do I need employers’ liability insurance if I’m self-employed?
Employers’ liability insurance protects you should an employee or former employee be injured or suffer an illness as a result of working for you.
Legally, you must have employers’ liability if you employ anyone. It’s important to know that the definition of ‘employee’ includes more than just regular full-time workers. It also means:
- part-time workers
- trainees
- apprentices
- friends helping out for free
- other volunteers
- some sub-contractors (depending on the nature of the contractual relationship).
You can be fined £2,500 per day if you don’t have employers’ liability when you should. If you are in any doubt, speak to your chosen insurer.
What other construction insurance do I need if I am self-employed?
You should consider tools insurance. If your tools are lost or stolen, you need to be able to replace them quickly so you may get back to work.
You may also need to consider professional indemnity insurance. This protects you if you provide advice as part of your work, which subsequently turns out to be negligent, resulting in a financial loss for the client.
You should also consider whether you need contract works insurance. This covers you if works in progress are damaged.
How much insurance cover do I need?
Typically, you will need a minimum of £5 million in employers’ liability cover. A small business or self-employed contactor would normally have public liability cover of between £2 million and £10 million.
However, what is a recommendable level of cover for your business will depend on your circumstances and the types of jobs you work on. Talking to an insurer with experience of serving the construction industry is a good starting point for more information.