What insurance does a tradesperson actually need

Insurance is the kind of thing you ignore until the day you need it. For a trade business, one claim can wipe out months of profit. This guide walks through the cover that matters, what the law actually requires, and what you can safely skip until later.

Public liability: the one almost everyone needs

Public liability covers you if your work injures a member of the public or damages their property. A customer trips over your toolbox. A pipe you fitted leaks and ruins a kitchen ceiling. Building materials left on the path cause a passerby to fall.

Public liability is not a legal requirement. But in practice you cannot skip it. Many main contractors will not let you on site without it. Local authorities and big commercial clients often ask for it before awarding work. And if something goes wrong without cover, you pay the full cost yourself.

Typical cover levels are £1 million, £2 million or £5 million. Check what your clients ask for before you buy. Bigger contracts usually demand bigger numbers. Local authorities often want £5 million.

Employers liability: the one the law demands

If you hire anyone, this one is not optional. Employers liability insurance is a legal requirement in the UK under the Employers Liability Compulsory Insurance Act 1969. It covers claims from people who work for you if they are injured or fall ill because of their job.

The legal minimum is £5 million of cover. Most policies give £10 million as standard.

Here is what catches people out. The law applies the moment you hire anyone. A part time labourer counts. A temp counts. An apprentice counts. A labour only subcontractor who uses your tools and works under your direction can count too, even if their invoice says self employed. The HSE looks at how the person actually works, not what the contract says.

The fine for trading without it is up to £2,500 for every single day. There is also a £1,000 fine if you do not display your certificate where your workers can see it, or refuse to show it to an inspector.

If you work completely alone with no staff, you do not need it. The day you take someone on, you do.

Professional indemnity: for advice and design

Public liability covers physical damage. Professional indemnity covers bad advice. If you design a heating system, plan an electrical layout, or give paid advice that turns out wrong and costs the client money, this is the cover that responds.

Trades that only do hands on work usually do not need it. If your quotes include design, drawings, or technical advice, talk to a broker about it.

The extras worth considering

Tools cover. Your tools are how you earn. Policies can cover theft from your van, accidental damage, and fire. Set the limit to the true replacement value of your kit.

Contract works. If you are in the middle of a job and a fire or storm wrecks the unfinished work, contract works cover pays for the materials and labour to redo it. Builders on bigger projects often get asked for this.

Personal accident and income protection. If you are injured and cannot work, the money stops. These policies pay out a set amount while you recover. For a one person firm, this can be the difference between a bad month and a dead business.

Business motor. If you use your van for work, your personal motor policy may not cover business use. Driving to jobs counts as business use. Check the policy wording.

How to buy without overpaying

1. Start with the risks you actually face. A lone painter needs different cover from a builder with three staff.

2. Ask what your clients require. Check contract terms before you buy. Buying £2 million of cover then learning the site demands £5 million is an expensive mistake.

3. Be honest about who works for you. Understating staff numbers or calling an employee a subcontractor can void a policy when you claim.

4. Review every year. As the business grows, your cover should grow with it. A one person firm that takes on its first employee needs employers liability from day one.

How PlusWise helps

Insurance is easier to manage when your business records are in order. PlusWise keeps your client list, jobs, quotes, and invoices in one place, so when a broker asks about your turnover, your staff, or the type of work you do, the answers are right there.

You can also keep a note of your policy renewal dates alongside your jobs, so nothing lapses by accident. A lapsed policy is the same as no policy when something goes wrong.

Quick answers

Is public liability a legal requirement? No. But most contractors and commercial clients will not work with you without it.

Do I need employers liability if I only use subcontractors? Maybe. If they work under your direction using your tools, the HSE may treat them as employees. Bona fide subcontractors who bring their own kit, set their own hours, and work for other clients too are usually fine with their own cover. When in doubt, get advice before the job starts.

What happens if my tools are stolen from my van? Only covered if your tools policy includes theft from vehicles. Check the wording. Many policies have conditions about how the van is locked or where it is parked overnight.

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Sources checked October 2026: HSE guidance on employers liability insurance; UK contractor insurance guides covering public liability, employers liability, and tools cover.