Must tradesmen have public liability insurance?

If you work as a tradesman in the construction industry, it is important to have correct insurance in place. But does that mean tradesmen must have public liability insurance and, if so, why?

What is public liability insurance?

Public liability insurance is a type of business insurance that protects businesses and tradesmen if something they do (or fail to do) causes injury to a third party or damage to property.

For example, if your work sparked a fire in a client’s property, or a member of the public tripped over your equipment, causing them to fall and seriously hurt themselves, your insurance would cover any subsequent claim for damages or compensation.

Is public liability insurance a legal requirement?

It is not a legal requirement, but it is sometimes a contractual requirement. Many large businesses and public sector organisations will refuse to work with you unless you have public liability cover. If you do not have it, you will be in breach of contract.

Smaller clients may also expect you to be insured, and trade associations and professional bodies may expect you to have public liability as a membership requirement.

Why is public liability insurance important?

However careful you may be, accidents happen. Public liability claims are relatively common in the industry.

It is important to be aware that the cost of a claim can add up to a large amount of money. For example, if you are judged by a court to be responsible for a client falling and fracturing their ankle, you may have to pay damages and compensation which could include:

• lost earnings for the time they are unable to work
• the cost of transportation to and from hospital and outpatient appointments, if they are unable to drive
• treatment costs
• legal fees

If you cannot pay, your business, reputation and assets may be at risk.

How much public liability insurance cover should I have?

This will depend on the sort of work you do. If you take on high-value and complex jobs, you may need more cover than a sole trader involved in smaller projects.

It is common for a small business in the construction industry to have public liability cover of between £2 million and £10 million.

How much does public liability insurance cost?

This will depend on a few factors such as the size of your business and the sort of work you do. The best thing to do is to apply for a quote online.