Contractor insurance

Public liability insurance

In case someone gets injured or their property gets damaged as a result of your business.

What’s typically covered by public liability insurance for contractors?

Claims against your business for:

• accidental damage caused by you or an employee to someone else’s property while you’re working, or as a consequence of your contracting work (remember, you must have employers’ liability insurance if you employ people – it’s a legal obligation)
• accidental injury caused by you or an employee to someone else while you’re working, or as a consequence of your contracting work

For example:

• you’re working as a flooring contractor and you catch a pipe by accident, which damages your customer’s underfloor heating
• you’re a plumber who’s been subcontracted by a builder to work on the customer’s bathroom, and while you’re draining down the tank in the loft, you accidentally trigger a leak, resulting in water damage to the oak floor
• you’re an IT contractor installing network cabling for a client, and your employee trips and puts their hand through a wall, so the damage needs to be repaired
• your employee spills a glass of water over a laptop at your client’s office, causing it to break

Read more about public liability insurance

Employers’ liability insurance

In case your employee gets sick or injured while they’re working for you.

What’s typically covered by employers’ liability insurance?

Claims against your business for:

• employees, temporary staff or casual workers becoming unwell or suffering an injury over the course of their work for you

**Employers’ liability insurance is required by law if you have people working for you. Without it, you could be fined up to £2,500 a day for each employee.**

For example:

• your employee trips over some boxes of equipment that have been left on the ground at your place of work and breaks their wrist
• your employee gets food poisoning after eating a team lunch that you’ve had brought in by a caterer

Tools insurance

In case your tools are lost, stolen or damaged.

What’s typically covered by tools insurance?

• the tools you use to carry out your profession (especially hand-held tools and portable electronic tools), whether on site or stored at your business premises
• theft of your tools
• accidental damage, flood damage, or fire damage to your tools

For example:

• you’re a building contractor, and your employee drops your electric screwdriver down a flight of stairs, smashing it to pieces
• you’re a design contractor, and your graphics tablet gets run over by a car as you’re carrying it through the car park to a client’s office
• you’re an electrician who’s been contracted to rewire a customer’s house, and your power tools are stolen from your van while it’s parked outside

Read more about tools insurance

Professional indemnity insurance

In case you’ve made a mistake in your work or provided a service that didn’t meet the expected standards.

What’s typically covered by contractor professional indemnity insurance ?

Claims against your business for:

• professional negligence that causes your customer or client to suffer financial loss
• advice you’ve given that turns out to be incorrect

For example:

• a client alleges that your work has not met the description in the brief they gave you, so you need to pay legal costs to defend yourself
• due to unforeseen circumstances, you run over the deadline for a contract you’re working on – and this delay ends up costing your client money, which they’re holding you responsible for

Read more about professional indemnity insurance

Business and office equipment insurance

In case your business and office equipment is lost, stolen, or damaged.

What’s typically covered by business and office equipment insurance?

• theft of your operational equipment (e.g. laptops and printers that you use for admin purposes) while stored at your business premises
• theft of your operational equipment
• flood damage, fire damage, or accidental damage to your operational equipment

For example:

• a spare business laptop is stolen from the stationery cupboard at your office
• a fire at your office damages your computers, printers and projectors
• your employee knocks a cup of coffee over your laser printer, so it stops working

What you’ll need additional cover for

• trade-specific tools that you use to carry out your profession as a contractor – these would be covered under tools insurance instead

Read more about business and office equipment insurance

Hired-in plant insurance

In case your hired-in plant items are lost, stolen or damaged.

What’s typically covered by hired-in plant insurance?

• accidental damage to items of the plant that you’ve hired from a third party
• loss or damage to hired-in plant items
• legal liability for loss or damage to hired-in plant items
• ongoing hiring charges

For example:

• you’re a construction contractor, and your employee uses the wrong key for a hired digger, so the digger breaks
• a concrete mixer is stolen from the construction site you’re working on, and the hire charges still apply while a replacement is source

Read more about hired-in plant insurance

Own plant insurance

In case your own plant items are lost, stolen or damaged.

What’s typically covered by own plant insurance?

• theft of your own plant items that you use to complete your day-to-day activities
• accidental or malicious damage to your own plant items

For example:

• you’re a sound engineering contractor, and your generator is stolen from the site when you’re on your lunch break
• you’re a landscape gardening contractor, and your employee crashes a forklift into a door, so the door needs to be repaired

What you’ll need additional cover for

• wear and tear of your own plant items (which may already be covered under warranty)

Read more about own plant insurance

Contract works insurance

In case your work in progress is destroyed, disrupted or delayed.

What’s typically covered by contract works insurance?

• works in progress for both domestic and commercial sites
• damage or theft to the tools and equipment left on site that are required to complete a job

For example:

• vandals set fire to your construction site overnight, causing damage to the ongoing works and setting back the completion date that was agreed by the main contractor

Read more about contract works insurance

Legal expenses insurance

In case you’re faced with legal costs while running your business.

What’s typically covered by legal expenses insurance?

• legal costs that you’re responsible for within your contracting business
• property damage, nuisance or trespass – specifically, the associated legal claims and compensation payouts
• tax and compliance disputes and investigations that you need assistance with
• access to expert advice – such as a tax advice phone line, a confidential 24/7 legal phone line, and crisis PR support to help you limit the damage to your brand reputation

For example:

• your company is selected at random for an audit or you’re investigated by HMRC, so you need a hand dealing with the tax enquiries – either for the business itself, or for you as an individual and any other directors
• you need to defend your legal rights following the dismissal of a member of staff
• you need to engage a lawyer to help you resolve a dispute with a client or a current employee

Read more about legal expenses insurance

Personal accident insurance

In case you or anyone you’ve covered has an accident.

What’s typically covered by personal accident insurance?

• injury or death at work or outside of work, for anyone covered on the policy
• lost income, medical costs and hospitalisation benefit

For example:

• you’re visiting a client at their office and you trip over the office dog, causing you to fall over and break your wrist
• you trip over a toolbox while working on site for a customer and break your ankle
• you’re on a morning run before work and you stumble over a log in the woods, causing you to fall and break your arm
• you sprain your ankle on a night out with your friends at the weekend

Read more about personal accident insurance

Is public liability enough for third party property damage?

In some situations you may need more than public liability to cover certain kinds of property damage. Learn about hired-in plant cover and contract works cover.

Can I just cover my most expensive tools?

Make sure you cover the total cost of replacing all your tools or you’ll only get a proportion of your claim paid out if something happens to them. Learn about tools cover.

Which type of workers do I need insurance for?

Employers’ liability insurance is a legal requirement if you employ people.

If you have people working for you, including bona fide subcontractors (BFSC), labour-only subcontractors (LOSC), part-timers, or full-time staff, employers’ liability insurance is required by law.

Read on for our simplified guide to the difference between labour-only subcontractors and bona fide subcontractors.

Will tools insurance cover all my equipment?

Depending on what you use to do your work, you may need other covers.

You may need more than tools insurance – for example, business equipment insurance if you have a work laptop, plant insurance if you use machinery.

Does contractors insurance cover my work correctly?

Make sure you’re picking the right cover to protect you properly. It’s important to know that if you have another trade or job, you’ll need additional cover. For example, do you need to consider freelance insurance or it consultant insurance?

Do I need cover for other types of work?

If you provide other services, make sure you’re covered:

• Builders insurance
• Electrical contractors insurance
• Plumbers insurance
• Flooring contractors insurance
• Haulier insurance
• Agricultural contractor insurance
• Labourer insurance

Other types of insurance

• Limited company insurance
• Self-employed insurance
• Freelance insurance
• Consultant insurance
• Contractors insurance
• Sole trader insurance

Which public liability cover limit should I choose?

Think about the maximum possible loss your business could face in the event of a claim, and make sure you take legal fees and damages into consideration. You can choose from three levels of coverage – £1 million, £2 million, or up to £5 million.