Insurance for the Self-Employed

Tradesman liability insurance is something that every self-employed person must have by law. There are two main parts of this insurance: public liability insurance and employer’s liability insurance. If you are self employed but do not have any employees who work for you, then you don’t need the employer’s liability insurance. Public liability insurance, while not required by law, is highly recommended and will protect you from a number of problems.

What public liability insurance covers is any claims that could be made against you by a third party. For a construction worker, this might be someone walking past your site who trips over a tool and is badly injured. For someone working as a builder, plumber, electrician, or other trades that involve entering a client’s house, this will cover the accidental destruction of property in the owner’s house, whether or not it is caused directly by the work you are doing.

 

Employer’s liability insurance

 

Employer’s liability insurance, put simply, covers the possible injury or death of your employees in the event that you are sued for damages resulting in your negligence. This will typically cover the amount that the employee or their family is asking for as well as the associated legal expenses. This type of insurance is typically sold along with public liability insurance as the two go hand-in-hand.

There are many other types of insurance that a self-employed person will need to have or at least consider depending on the type of business you have. Contractors, builders, and other construction tradesmen will probably need contractor’s all risks insurance, which will cover everything from employee’s tools; the property on which the work is being done; and loss of materials, tools, and equipment due to theft or damage.

 

Personal insurance

 

Personal insurance is something that many people overlook, but it is extremely important for self-employed people, whether or not you have employees. Also called personal accident insurance, it will cover you as the owner if you are injured and not able to work for a period of time. It will provide you with a monthly tax-free income during the time you are unable to work, hospital cash that goes toward covering hospital bills, and may include a lump sum payout depending on the injury. This is another type of insurance that is highly recommended for construction worker, but is useful for any person who is self-employed, including hairdressers and beauticians.

For those in the construction industry or those who use expensive machinery and tools, you may want machinery and tool insurance. In the construction industry in particular, there are a lot of chances for theft, accident, damage, and injury to occur as a result of the heavy machinery being used. This insurance will also typically cover damages caused by third parties.

When selecting the types of insurance needed for your specific trade, take your time and do your research. Check first to see which types of insurance are required by law, and which ones you think you will really need. It’s important also to measure the cost of the insurance against the risk of not having it. It is always better to have more coverage that you think you might need, even though if you are just starting out it may be financially difficult to have insurance.