Mistakes To Avoid When Choosing Tradesman Insurance

by | Jun 9, 2023 | Construction Insurance, Tradesman Insurance

Tradesman insurance plays a crucial role in safeguarding professionals in the trade industry.

Whether they are electricians, plumbers, carpenters or builders, tradespeople are exposed to numerous potential hazards daily. These risks can range from accidental property damage to third-party injuries – and even legal claims arising from errors or negligence. Tradesman insurance provides essential coverage against these risks, offering financial protection and peace of mind.

However, when choosing insurance coverage, it’s important to avoid several common mistakes that can undermine the effectiveness of the policy. In this article, we discuss these mistakes and the associated drawbacks, so that you can secure cover that is tailored to your unique business needs.


Mistake 1: Not assessing coverage needs properly


One common mistake in the trade industry is the failure to accurately assess the specific insurance needs of the business at hand. It is essential to evaluate the nature of the trade, the tools and equipment involved, along with potential risks, to determine the appropriate coverage.

For example, a carpenter may require coverage for damage to expensive woodworking machinery, while an electrician may need protection against electrical faults that may lead to property damage or injury. Neglecting these considerations can lead to inadequate cover and severe consequences.

Imagine a plumber causing water damage to a client’s property due to a faulty repair, but lacking liability coverage to handle the resulting legal expenses. It is vital to accurately assess insurance needs to avoid financial repercussions and protect both reputation and livelihood.


Mistake 2: Overlooking liability insurance


Liability insurance is of utmost significance for tradespeople, as it offers crucial protection against potential risks and financial implications.

The two common types of liability coverage that fall under the umbrella of tradesman insurance are:


Public Liability Insurance – this safeguards against third-party injuries or property damage that may occur during work.

Products Liability Insurance – this provides coverage for damages resulting from faulty products or materials used in the trade.


Without adequate liability insurance, tradespeople face the risk of expensive legal claims, medical expenses or repair costs that could potentially cripple their businesses.

Moreover, liability coverage is closely tied to client service in the construction industry, assuring clients that any potential damages or accidents will be handled professionally, which builds trust and reinforces a strong reputation


Mistake 3: Ignoring professional indemnity insurance


Professional Indemnity Insurance is highly relevant for tradespeople as it offers essential coverage for errors, omissions and professional negligence. This type of insurance protects tradespeople in case they make mistakes or fail to deliver services as expected, resulting in financial loss or damage to their clients.

This form of the cover was previously seen as vital only for specific members of a project team, such as professional designers for example. In more recent years, the notion of design responsibility now falls on many shoulders and as such, various members of one project team need to seek professional indemnity insurance.

For instance, if an architect miscalculates the structural integrity of a building, leading to costly repairs, professional indemnity insurance can cover the resulting expenses. Similarly, if a tradesperson provides faulty advice or recommendations that lead to financial loss for their client, this type of cover ensures that they can compensate for any consequential damages.


Mistakes To Avoid When Choosing Tradesman Insurance - ERM Financial Services (2)


Mistake 4: Neglecting tool and equipment coverage


A common mistake among tradespeople when seeking tradesman insurance cover, is not considering their tools, equipment and machinery as insurable entities.

Failing to protect these essential assets can have significant financial implications. Loss, damage or theft of tools and equipment can disrupt work schedules, lead to costly replacements, and even result in project delays. What’s more, without adequate coverage, tradespeople may be left shouldering the financial burden themselves.

It is also crucial to recognise the connection between tradesman insurance and client service, particularly in construction projects. Equipment coverage, often included in Contractors All Risks insurance, protects against risks on construction sites, ensuring that any damage or loss of tools and equipment is adequately covered, enabling tradespeople to fulfil their commitments to clients efficiently and professionally.


Mistake 5: Failing to review policy terms and exclusions


Carefully reviewing policy terms, conditions and exclusions is a must for tradespeople when securing insurance coverage.

Common pitfalls and misunderstandings often arise from overlooking or misinterpreting policy details, leading to unexpected gaps in coverage.

To ensure a thorough understanding of insurance policies, tradespeople should:

  • Read the policy thoroughly, paying attention to coverage limits, deductibles and exclusions
  • Seek clarification from the insurance provider for any ambiguous or complex terms
  • Evaluate the adequacy of coverage for specific risks and liabilities related to their trade
  • Regularly review and update insurance policies as business needs evolve


ERM Financial Services is your provider of comprehensive tradesman insurance


By avoiding the above mistakes, tradespeople can sidestep costly surprises and ensure that their insurance policies provide the necessary protection for their unique circumstances. Making informed decisions with the help of professional advice is a must to achieve this.

ERM Financial Services are your go-to experts, with a proven track record in ensuring tradespeople are fully protected against the unique risks that they face. From Construction Insurance to Contractors All Risks and everything in between, we can help design a policy that incorporates all of your most pressing needs.

Get in touch today and let us take care of the rest. Don’t forget to also check out our blog and resources for the latest insurance industry insights.