What Insurance Does a Self-Employed Tradesman Need?

What should a self-employed tradesman buy first?

Buy in the order of what would close the business fastest. A liability claim you cannot pay is the quickest way out of the trade, a stolen van full of kit is the second, and an injury that stops you working is the third.

Priority beats completeness

Work down the list until the next item stops being worth the money. Most one-person trades stop somewhere around the third or fourth line for the first couple of years.

Nobody starts with the full package, and nobody needs to. Two sections bought properly beat six bought at limits that will not answer the claim.

Where the legal duty sits in the order

Everything else on the list is a commercial decision rather than a rule. The test for each one is whether you could fund the loss yourself next week.

Employers’ liability jumps to the front of the queue the day you take somebody on, because it is a statutory duty rather than a judgment call. Until then it does not apply to you at all.

Why is public liability the first thing you buy?

Because it is the only cover that stands between a third-party claim and your own money, and because clients check it before they hire you. No statute requires it, and almost nobody will let you work without it.

Nothing separates you from the claim

A sole trader has no company between the business and the house. Public liability for the self-employed is the substitute for that missing wall.

The claims are ordinary rather than dramatic. A plumber who leaves a valve open overnight can generate a five-figure water damage bill from a job that paid £300.

Clients ask before they book

Public liability is not compulsory in law for any trade. The only UK sector legally obliged to hold it is horse riding establishments, according to the ABI.

Commercial clients, letting agents, housing providers and main contractors all check certificates as a condition of access. Trade schemes such as Gas Safe, NICEIC, TrustMark, FMB, CHAS and SafeContractor make cover a condition of membership.

How much public liability cover should you buy?

£1 million to £2 million clears most domestic work. £5 million is what local authorities, NHS trusts, schools, social housing providers and main contractors usually specify, and it costs far less to add than most tradesmen expect.

Match the limit to your biggest client

Domestic householders rarely name a figure and simply ask whether you are covered. Everyone above them in the chain names one and will not move on it.

Buy for the work you are chasing rather than the work you did last year. £2 million of cover is now the practical standard for a working trade, with £1 million treated as the bare minimum.

Stepping up costs less than turning work down

SimplyQuote’s own public liability cost guide puts £1 million at around £106 a year against roughly £140 for £5 million. The gap between those two premiums is smaller than one framework job.

When does a one-person business need employers’ liability?

The moment somebody works under your direction, even for a day. That includes apprentices, casual labourers and most labour-only subcontractors, and the statutory minimum is £5 million under the Employers’ Liability (Compulsory Insurance) Act 1969.

Labour-only subcontractors are the trap

This is the most expensive mistake self-employed tradespeople make. A subbie who turns up with hands and a van, works to your instructions and uses your materials is usually your employee for insurance purposes.

Getting it wrong means trading uninsured at £2,500 a day, plus £1,000 for failing to display the certificate. An employers’ liability policy is cheap next to that, at roughly £60 a year for one office worker to £750 for five trade employees according to swoopfunding.com.

What cis does not do

Deductions are taken from labour only. VAT, materials, consumables, fuel, plant hire and prefabricated materials come out of the figure first.

Being paid under the Construction Industry Scheme tells you nothing about insurance. Deductions run at 20% registered, 30% unregistered and nothing with gross payment status, on labour only.

Should you insure your tools before anything else?

Straight after public liability, yes, if replacing the kit would stop you working. Tools cover is the section a self-employed trade claims on most often and the one with the tightest conditions.

What the kit is really worth

Add up replacement cost today rather than what you paid. Under-declare and the insurer can scale the settlement down in proportion.

Money.co.uk publishes tool cover at £13.43, £26.86 and £80.56 a month for £2,500, £5,000 and £10,000 of cover, with a 10th percentile of £3.52 a month. A painter and decorator with sprayers and access kit is usually further up that scale than they think.

The conditions that void a tools claim

Most wordings restrict overnight theft from a vehicle, or apply a higher excess to it, and many require aftermarket deadlocks. Theft without signs of forced entry is commonly excluded outright.

A Simply Business survey of 645 tradespeople in March 2026 found 51% had been hit by tool theft, with an average claim of £2,646. That is the insurer’s own survey rather than an official statistic.

What happens to your income if you cannot work?

Nothing, unless you have bought something for it. Self-employment comes with no sick pay, and neither liability section pays a penny when you are the person who is hurt.

Personal accident versus income protection

Neither is expensive next to the alternative of stopping work with no income. Both are bought on what you would need each month rather than on a headline sum.

Personal accident pays a benefit on a fixed scale after injury, usually with a deferred period and a maximum number of weeks. Income protection is broader and longer, because it responds to illness as well.

How the tax treatment differs

Income protection premiums are not deductible for a sole trader, and the benefit is then paid tax free. That trade-off is worth understanding before you compare quotes on price alone.

A handyman off the tools for two months has no employer behind them. That is the gap this section exists to fill.

Do you need professional indemnity as a one-man band?

Only if you advise, design, specify or certify. Following somebody else’s drawings creates no professional indemnity exposure, but signing off a design does.

The line between fitting and advising

Design and build contracts pull ordinary trades across that line without anybody announcing it. Read what the contract makes you responsible for before you sign it.

Size a heating system, specify materials or certify compliance and the loss becomes financial rather than physical. Professional indemnity is the only section that answers it.

Claims-made cover needs continuity

Professional indemnity is written claims-made, so the policy in force when the claim arrives is the one that pays. Let it lapse and every year of past advice loses its cover at once.

Does your van need a different policy?

It needs the right use class. Carriage of own goods is what most self-employed trades require, and a social, domestic and pleasure policy does not cover driving to jobs.

Use class, not vehicle type

Carrying other people’s goods for payment is hire and reward, which is a different product again. Get the class wrong and a claim can be declined on the spot.

The class describes what you use the vehicle for rather than what it looks like. Van insurance on the wrong class leaves you effectively uninsured on the road.

Why the van policy will not cover your kit

Contents limits on standard van policies run to a few hundred pounds. Tools in the back are a tools section job, not a motor one.

What does the whole package cost for one person?

Published trade quotes start at around £6 a month for a one-person business. SimplyQuote’s cost guide puts tradesman insurance overall between £200 and £1,200 a year, with trade risk doing most of the work.

Real published figures, not an average

Two tradespeople in the same trade can pay very different premiums on turnover and claims history alone. Quote comparisons only mean something when the limits and excesses match.

There is no reliable national average premium for a trade, so treat any single figure with suspicion. Worked quotes and per-trade ranges are more useful.

What moves your own number

Trade, turnover, chosen limit, excess and claims history, in roughly that order. What tradesman insurance costs breaks the ranges down trade by trade.

Are the premiums tax deductible?

Business insurance taken out wholly and exclusively for the trade is an allowable expense, and HMRC names public liability and professional indemnity among them. Cover pointed at you personally is not.

What you can and cannot claim

The test is whether the policy exists for the business rather than for you. A policy that does both jobs generally fails it.

HMRC’s expenses guidance for the self-employed sets the wholly and exclusively test. Public liability and professional indemnity are allowable under BIM45500.

Your own life assurance, health and medical cover, home contents and the private-use share of vehicle insurance are not deductible. Insurance Premium Tax is 12%, embedded in the premium and not reclaimable.

What to keep, and for how long

Keep records for five years after the 31 January submission deadline for that tax year. That includes premium receipts, schedules and anything supporting a claim, along with your home-based business records if you work from a home office.

Sole traders working from home also need to check where household cover stops. Public liability as a sole trader does not extend to business stock or tools kept in the garage.