What is handyman insurance?
Craftsmanship involves dangerous tools and working in unfamiliar locations, so even the most cautious and experienced craftsman may end up on the wrong end of an accident. Without proper craft insurance, they could face trial and pay legal fees and compensation payments, or replace stolen tools with their own money.
Insurance is not required by law for a craftsman, but it makes good business sense to protect yourself against certain risks. And your clients may prefer to work with a handyman who is properly protected as it will protect the client as well. Some customers may even want to see your insurance certificate as proof that they are insured. It is not unusual.
Insurance for craftsmen
There are at least 6 types of insurance to consider when providing craft services:
- Liability insurance. Covers personal injury and property damage claimed by a third party that your company was negligent.
- Tool and equipment insurance. Covers your tools and equipment if they are stolen or damaged in a covered event such as a fire. Wear and tear or defects are not covered.
- Personal accident insurance. Provides means to make up for lost income when you are injured at work and unable to work. May provide both short-term coverage for weekly or monthly benefits and flat-rate payments for more severe injuries.
- Cover legal costs. If you need legal assistance to pursue an unpaid debt, have a contractual dispute, or, among other things, are subject to an HMRC tax investigation.
- Employer’s liability insurance. When you hire employees, employers’ liability insurance is required by law in almost all cases, even if you pay for it in cash or if you work part-time.
- Commercial vehicle insurance. Regular social, household and entertainment insurances as well as insurance for shuttle vehicles do not protect a craftsman’s work vehicle. A craftsman by nature drives to multiple workplaces and likely uses a special van that can even be equipped to store tools in certain ways. In most cases, a tradesman will likely want commercial vehicle insurance that covers work-related driving and the tools it contains. If a tradesman only wanted his private car to be covered for work-related driving and not tools, it might be enough to add “business use” to his car insurance. Ask your provider for more information.
While there may be other types of cover a craftsman might want to consider as well, these are the most common types of cover. Every craft business needs to assess the risks it faces and what types of protection it wants.
Artisans public liability
The backbone of a craft insurance package is public liability, which covers personal or property damage claims by third parties. For example, if a customer trips and falls on your tool kit and injures themselves, they can take legal action indicating that you negligently omitted your tools. Or if you accidentally damage a glass-framed painting hanging on the wall while carrying a ladder up a narrow flight of stairs and the customer claims the cost of repairing the valuable painting.
Craftsmen’s public liability covers both the legal costs of defending against a claim and the compensation you have to pay for paying the injured party. It even covers frivolous claims for which you are not responsible or were not negligent but someone is trying to sue you anyway.
Craftsman liability insurance costs
A tradesman’s liability insurance starts at around £ 75 per year. However, if you shop around, you can find cheaper insurance policies. With this premium you can easily get £ 2 million liability insurance if you work as a sole proprietorship. If you want a higher insurance limit, you will of course pay a higher insurance rate. On the plus side, adding it to your coverage limit isn’t usually as expensive as you might think. Usually the initial cover costs the most.
If your craft business is structured as a partnership or limited liability company, the cost of your liability insurance may also increase. And prices can go up as your business grows and your sales increase. At a larger company there are simply more people who could be negligent and more opportunities for an accident and a claim.
If craft insurance seems expensive to you, consider the potential cost of a claim – both legal costs and compensation payments. Without insurance, a craftsman would have to bear these costs himself, which is a financial burden that most people and small businesses cannot or want to bear without facing financial ruin.