The right insurance depends on the work you do, the people who work with you and the contracts you accept. Employers' liability and vehicle insurance can be legal requirements. Other covers are usually commercial choices, but a customer, main contractor, landlord or trade body may insist on them.

Employers' liability can be compulsory

In Great Britain, employers normally need employers' liability insurance from an authorised insurer, with at least £5 million of cover. It covers an employer's liability if someone is injured or becomes ill through their work.

Exemptions depend on the arrangement and business structure. Check GOV.UK's employers' liability guidance and the HSE guide for employers before assuming you qualify.

Northern Ireland has separate legislation. HSENI also describes a minimum of £5 million of compulsory cover for employers. Use its Northern Ireland insurance guidance to check the requirements there rather than applying a Great Britain exemption.

Subcontractor arrangements need care. Calling someone self-employed does not decide their legal status or whether they should be treated as an employee for insurance purposes. Tell the insurer exactly how labour is engaged.

A work vehicle needs the right motor cover

Motor insurance is compulsory for a vehicle used on the road. A personal policy may not cover business journeys, tools carried for work or another driver. Tell the insurer how the van or car is used and check the certificate and policy wording.

Government business guidance lists motor insurance as a legal requirement when a vehicle is used in the business, including a personal vehicle used for business purposes. See insuring your business.

Public liability protects against third-party claims

Public liability insurance can cover claims if a member of the public is injured or their property is damaged because of your business activities. It is not a blanket legal requirement for every sole trader, but many contracts and customers require it.

Choose the limit by looking at the work, premises and contract, not by copying another tradesperson. A job in an occupied care home presents different exposure from a minor repair in an empty property.

Check whether advice or design creates another risk

Professional indemnity insurance can cover claims arising from professional advice, design or specification. A tradesperson who only installs a customer's chosen product may have a different exposure from someone designing a heating system or specifying structural work.

Explain the services accurately to a broker or insurer. Do not assume public liability covers mistakes in professional advice.

Protect the things that keep you working

Depending on the business, consider:

• tools and equipment, including theft conditions for tools left in a vehicle;

• owned and hired-in plant;

• contract works and materials on site;

• stock kept at a workshop or home;

• personal accident or income protection if injury would stop earnings; and

• legal expenses or cyber cover where the exposure justifies it.

The policy name alone does not tell you what is covered. Read the limits, excesses, exclusions and conditions.

Ask better questions before buying

Give the broker or insurer a clear picture of the business:

1. Which trades and activities do you carry out?

2. Do you use heat, work at height, dig, design or advise?

3. Do employees, labour-only subcontractors or bona fide subcontractors work with you?

4. What is the highest-value job or property you work on?

5. Which tools, plant and materials need cover, and where are they stored overnight?

6. Do contracts set minimum cover limits or special terms?

7. What actions could invalidate the cover?

Tell the insurer when the work changes. A policy arranged for domestic plumbing may not cover a later move into larger commercial plant rooms without an update.

Compare the cover as well as the premium

Ask for quotations based on the same activities, cover limits and excesses. Check what you would have to pay yourself if you made a claim. A cheaper policy with a large theft excess or an overnight-vehicle exclusion may not cover the loss you were trying to insure.

Keep the statement of facts you gave the insurer and correct mistakes before accepting the policy. If you use a broker, ask them to explain any condition you cannot meet in practice.

Put the cost into your prices

Insurance is an annual business overhead. Include the premium and any finance cost once in the overheads behind your labour or day rate. Do not add the same cost again to each quote if your labour rate already recovers it. The day-rate calculator helps spread annual costs across realistic chargeable days.

Review the cover before renewal and when you take on a new kind of job, hire someone or buy expensive equipment. Keep certificates and policy documents where you can produce them when a customer or contractor asks.

Written by Chris, founder of TradePilot. General information, not insurance or legal advice. Cover depends on the policy, activities, location and contract. Last reviewed 16 September 2026 against the official sources linked above.