Figuring out the best insurance policy for you can be confusing as there is no one-size-fits-all answer in most cases. In particular, there are so many different policies for tradesman and contractors available under the umbrella of construction insurance that choosing the right policy can take a deep level of understanding.
You of course want to make sure you are not overspending on insurance you don’t actually require. But, at the same time it is essential to have the correct level of cover for your needs. Wrong decisions can leave contractors with an inadequate level of coverage, meaning risks are increased.
What kind of insurance do general contractors need?
The type of insurance that tradesmen and contractors need really depends on a variety of factors. Insurance providers will take each policy on a case by case basis and really get to know you and your business’s requirements. The insurance they provide for you will usually be a combination of individual covers rolled into one main policy. Some of the most common forms of contractors / tradespeople insurance includes:
Employers Liability Insurance
If you are a business who employs people, by law you need to have employers liability insurance. This covers you against claims made by your employees, for example if they become injured or ill as a consequence of work undertaken.
Be mindful that volunteers, contractors and casual staff may be considered your employees, so it is key to understand the level of cover necessary for you.
Public Liability Insurance
This is standard cover for most trades. The construction sector has considerably more risks than other sectors as there is a chance someone could be injured due to your work, or property could be damaged due to your negligence. Public liability insurance protects you against this and also covers legal fees and compensation costs.
Business Insurance
This is typically more of a comprehensive policy, including public liability, employers liability, contract works, own plant and hired-in plant protection.
A ‘Contractor’s All Risks’ policy is the most common type of business insurance taken out by contractors and tradesmen and can include a variety of individual covers under one ‘umbrella’.
Contract works, tools, equipment and machinery insurance
When it comes to the value of the contract itself, it is important to agree who is responsible in the case of an incident. If a claim occurs in the middle of the contract, who is going to pay to reinstate?
This insurance is often overlooked with the contractor thinking the household or business has organised the cover and the homeowner or business owner thinking the contractor is providing the insurance. Very often it has been forgotten all together and it is only when a loss occurs that the problem is unravelled with a severe risk of reputational damage to the contractor alongside a potential legal action against them.
Tools, equipment and machinery are also one of the most underinsured areas in the industry, largely due to a lack of understanding of the value of your equipment. These need to be insured even if they are not kept on site but still used for your business.
Tools can be very expensive to replace, so you don’t want to be put out of pocket should they be stolen. In the event that this happens, this could even put you out of business for days, weeks or even months.
Personal Accident Insurance
Personal accident insurance is a policy that covers loss of income as a result of being seriously injured through an incident at work, If this results in a death a set payment is made
It can also help you if you cannot work while recovering from an injury, which is especially important for contractors as you do not have the ‘security blanket’ of a consistent income.
The cover is usually a set amount up to a maximum of 2 years or until the injured party can return to work, whichever comes first.
How much does general contract liability insurance cost?
There is no exact answer to this as the premium depends on a variety of factors, including:
- How many employees you have
- The type of work you do
- The type of premises you work at
- The value of your contracts
- Any existing medical issues
- The value of your tools and machinery
A mixture of these will be taken into consideration depending on the policy/policies you require.
How much liability insurance should a contractor have?
What level of cover should be tailored to your individual requirementsHere at Stanmore Insurance, we are insurance brokers who really take the time to understand your individual needs on a case-by-case basis. Contact us for a quote today and find out how much liability insurance you need for your work.
