Tradesman Insurance

This is the maximum amount the insurance company will pay in the event of a claim being made. The limits are usually £1,000,000, £2,000,000 or £5,000,000. However, this can be increased to £10,000,000 and beyond.

Imagine if in the course of your business you accidentally:

• Flooded a customer's kitchen and they want to claim against you for a new carpet.
• Installed wiring incorrectly that resulted in an electrical fire which extensively damaged a customer's property.
• Used materials in good faith which turn out years later to have serious health risks attached.
• A trainee member of staff accidentally cuts through a cable and suffers electric shocks and burns.
• Your van containing all your tools and several pieces of hired equipment are stolen during the night.

Running a business creates considerable legal responsibilities towards your employees, the public and customers. Injury to your employees and members of the public could result in you being legally liable to pay damages if you or your employees have been negligent or found in breach of a statutory duty.

An employer's statutory duties are set out principally in the Health and Safety at Work etc Act 1974 and associated Regulations. You must identify the safety and health needs of your particular business activities by carrying out a risk assessment and take action to remove or control the risks in line with the appropriate legislative requirements.

Good management is an ongoing process. Should you make any changes in your workplace, you should reassess the hazards present. Advice on good health and safety management is available from the Health and Safety Executive and local authority environmental health departments.

Liability insurance will pay the amounts of any court awards or damages, claimants' costs and expenses where you or your employees are held legally liable, subject to any policy limits.

Every day businesses are exposed to a number of risks. Tradesman insurance will ensure that if the worst happens you have sufficient cover to help your business through any crisis.

By law, all employers must insure against their legal liability for injury, disease or death to employees and arising from their employment.

Employees will normally include, in addition to those under a contract of employment, apprentices and other trainees and those hired from another employer. The only exception to this rule is where all your employees are close relatives and you should check if you think that this exception may apply to you.

You are legally required to insure for at least £5 million but in practice most policies offer £10 million minimum cover. The law also requires that you exhibit a certificate of employers' liability insurance at each place of work. Failure to meet this requirement could constitute a criminal offence.

Public liability insurance covers your legal liability to pay damages to members of the public for death, bodily injury or damage to their property which occurs as a result of your business activities. It also covers legal fees, costs and expenses such as representation at any coroner's inquest, fatal accident enquiry or other court hearing resulting from an accident.

When deciding on how much cover to buy, you should carefully consider the maximum claim that could be made against you as awards for injury can exceed £1 million. Certain businesses, where there is a spreading fire or possibility of multiple personal injuries, could face claims for damages far exceeding this figure. The limit of indemnity applies to claims arising from a single incident.

If you make, repair or sell products, you could be held legally liable for damage or injury arising from defects in their design or manufacture even if you have not been negligent. Product liability insurance covers you in these circumstances up to a maximum amount each year.

The Consumer Protection Act 1987 makes it a criminal offence to supply unsafe consumer goods.

Even if you don't have any premises it is advisable to insure your tools and equipment against loss, damage or destruction.

By law you must insure your legal liability for injury to others and damage to their property arising from the use of vehicles on the road, known as third party insurance. Most business policies are comprehensive but sometimes third party, fire and theft only. Comprehensive cover includes damage to your vehicle. The third party section of a commercial vehicle policy will meet your legal requirements to cover your liability to others.