As a tradesperson, customers rely on your skill, judgement, and expertise. No matter how careful you are, you should always have a safety net in place in case something goes wrong. Whether you’re a builder, electrician, or plumber, having insurance gives you piece of mind, and lets you focus on doing your best work.
Let’s cover the basic things to consider when buying insurance for your home improvement business:
Public liability insurance protects you if something is damaged or someone gets hurt.
Public liability insurance protects you against property damage claims or injuries sustained by the anyone that’s connected to your work. It’s easy for a client to trip over your equipment while you’re working in their home and make an injury claim, and your business could be liable for damages and fines.
Even minor mistakes could cost you, so you want to make sure you’re covered financially. In fact, in most places, it’s a requirement for professional accreditation. Insurance companies are usually able to customize the coverage to fit your specific needs. Shop around to find an insurance provider that will meet your needs and give you the best rates.
If you employ other people, you need employer’s liability insurance.
If you employ other people, then you need employer’s liability insurance, and a displayed certificate to prove it. This type of insurance protects you if your employees are injured or become ill because of something at work. It can also protect you if former employees make a claim that they’ve developed a condition from their time working for you.
No matter if your staff is temporary, contract, or full-time, or whether you’re working on residential or commercial property, operating without the right insurance can result in fines for each day of operation. In most cases, business owners are only legally exempt from needing employer’s liability insurance if they are the only employee and/or own 50% or more of the company.
Professional indemnity insurance protects if you give the wrong advice to your customers.
For anyone in the business of giving professional advice, this type of insurance offers protection for your business if a client accuses you of offering advice that could be considered harmful or negligent. For example, if an electrician approves that wiring was installed correctly, and then an electrical fault later causes a fire, professional indemnity insurance will cover the costs of damages and/or compensation.
If you think professional indemnity insurance may be a good idea for your business, remember that you may need to extend the period of coverage beyond the timeline of a contract in order to protect you from any claims that may arise after a project closes.
There are a few steps you can take to reduce your risk of legal action. On any job site, mistakes and accidents happen. There are a few simple steps you can take to protect yourself and your business:
- Always make sure your client’s expectations are clear and agreed to in writing.
- Be honest about what can be achieved. Don’t “oversell” your abilities.
- Keep the work area as tidy as possible. Think about your placement of equipment and extension cords to not create any unnecessary hazards.
- Keep clients and the public away from dangerous areas when you’re working. This includes limiting walk-throughs for anyone not involved in the work.
Before you purchase insurance, be aware that insurance premiums are based on a number of factors specific to your business, which can include your previous claims history, the size of your business, and how much coverage you will need. It’s not much different from auto insurance - you pay according to the perceived risk of covering you.