Do self-employed electricians need insurance?

Question

Accepted Answer

As a self-employed electrician you will want to keep running costs as low as possible, so you may be wondering whether you need insurance.

Am I legally required to have insurance?

This will depend on your circumstances, and whether you employ anyone.

If you employ someone, even on a part-time basis or as a trainee, you are legally required to have employers’ liability insurance. This may also apply in respect of some sub-contractors.

Employers’ liability insurance protects you in the event something you do (or fail to do) is proved to have caused injury or illness to a current or former employee.

If you’re in any doubt as to whether you need employers’ liability insurance, check with a reliable insurance company.

If you have employees but fail to take out cover, you can be fined for each day without insurance.

What about public liability insurance?

This is designed to protect your business in the event something you do causes injury or harm to a third party, such as a client or a member of the public, or damages their property.

You may find some clients require you to have public liability insurance as a term of your contract. Your trade association may also insist you have it, in order to be a member.

In addition to protecting your business in the event of a damages claim, having public liability insurance can also help you to establish a reputation as a reliable tradesperson.

Do I need any other insurance?

If you provide professional advice as part of your work, you may also need to consider professional indemnity insurance.

If you give advice to a client that is incorrect, and this results in damage to themselves or their property, professional indemnity will cover you if they then successfully sue you.

You should also make sure your tools are insured. If they are lost, damaged or stolen, you may be unable to work and will need to pay a lot of money to replace them.

My business is small. How much is this going to cost?

Unfortunately, accidents can and do happen. It is important to have insurance as a small business, as it can be harder to pay an order for damages than it would be for a larger business with more assets.

If you are self-employed and not operating as a limited company, it is you who will have to pay any damages.

However, when calculating your insurance premium, an insurance provider will consider:

the size of your business
whether you have any employees
the nature of your work

You may find your insurance does not end up costing as much as you think.