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Contractors insurance is specialised business insurance for sole traders or a contracting business.
You can buy different types of insurance:
Employers liability insurance - covers costs if employees are harmed
Public liability insurance - covers costs if members of the public are harmed
Business contents - covers costs if your equipment is lost, damaged or stolen
🚩 Employers liability insurance is a legal requirement if you have staff
🚩 Clients may insist you have public liability insurance
Whether you own a contracting firm or are a self-employed contractor, insurance can financially protect you if something goes wrong at work.
Without insurance you could end up paying some very high costs if your equipment is stolen, your employee is hurt, or your work damages someone's home.
Many people are wary about hiring contractors who do not have comprehensive insurance policies in place, and many organisations have policies prohibiting them from hiring uninsured sole traders or companies.
Government contracts, for example, will usually insist you have a public liability insurance policy of at least £5-£10 million.
Whether you're working in a trade e.g. plumbing, or an IT contractor, there are 101 ways your equipment or tools could end up causing expensive damage that you may be expected to pay for.
With public liability insurance your insurance provider will pay the costs of accidental damage to other people's property, whether that's a client, supplier or member of the public.
Things can unexpectedly go very wrong when you are working as a contractor. If anyone becomes ill or injured because of your work you could be responsible for the associated costs, including expensive compensation claims.
Public liability insurance covers harm to members of the public. It is not a legal requirement, but some clients will insist you have it, especially if you have a contract with a commercial company or corporate business.
Business contents insurance can help you recover the cost of losing company equipment to fire, flood, theft and other disasters. Tool cover can offer similar protection for your expensive tools.
If you are a UK business and you have any non-family members working for you then by law you must have employers' liability insurance.
Without it, you can be fined up to £2,500 for every day you're not insured[3]
If anyone becomes ill or injured because of your work you could be responsible for the associated costs, including expensive compensation claims. This is far from an unlikely scenario: an average 47,000 construction workers are injured each year.[4]
Employers' liability insurance covers harm caused to employees, contractors, volunteers and anyone else doing any work for you. It's also a legal requirement.
This also included ex-employees. For example, if a worker falls off a set of ladders or electrocutes themselves and has issues years later they could sue their old employer for failing to put adequate health and safety measures in place.
You can be taken to court if a client or a member or the public believe they have been physically or financially harmed because of your company's business activities, including if their property is damaged.
Contractor businesses could be found liable for everything from damaging equipment or property, to a contractor slipping on-site and banging their head.
Public liability insurance can cover the legal fees and compensation payouts in the event of a claim.
That's how much was paid out in 2024. Without business insurance, those customers would have faced paying that bill themselves.
Comparing quotes from different insurers allows you to find the best deal out there.
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Public liability insurance protects you if your work harms members of the public.
Professional indemnity insurance protects you if you are accused of negligence.
Tool insurance covers costs if your tools are stolen, damaged, or lost.
Business interruption insurance protects against disruption from events like fires.
Personal accident insurance protects you if you're injured.
Business contents insurance protects equipment, including in home offices.
Per year | Cheapest | Average |
|---|---|---|
Flooring contractor - domestic | £76.60 [8] | £109.95 [9] |
IT contractor | £104.22 [10] | £145.82 [11] |
Plumbing, heating and ventilation contractor | £282.36 [12] | £489.96 [13] |
The table shows the average prices paid by our customers for domestic flooring, IT, and plumbing, heating and ventilation contractor insurance.
Average price means 51% of customers paid this amount or less. Cheapest price means 10% of customers paid this price or less.
According to our latest data, 10% of customers paid this when taking out an annual domestic flooring contractor insurance policy.
The cost of fixing insurable problems yourself is usually significantly more expensive than taking out insurance.
Almost 9 in 10[15] of business insurance claims made by MoneySuperMarket customers were accepted last year.
All insurance has conditions and exceptions, so you should read your policy documents carefully to make sure you know what is and isn't covered.
When it comes to business insurance, the cheapest option may not be the best option for you. Sometimes it is worth paying a little more to get a better level of cover.
Financial loss: Compensation payouts to third parties that had their person or property harmed by your work activities
Business van insurance: Standard motor insurance policies won't usually cover vehicles that are used for work
Legal expenses insurance: For things like employment disputes, property disputes, and tax investigations
Accidental death: Offers a lump sum should you or an employee die as a result of an unforeseen incident
Tools and equipment: Cover to repair and replace business equipment that is damaged or stolen
Business contents: Covers items such as office furniture or computers and phone systems for if they’re damaged or stolen
Professional indemnity: Covers you if your business is responsible for any professional negligence
Personal accident insurance: Offers a lump sum payment if you or an employee are hurt and no longer able to work
Intentional harm or damage: Either by yourself or an employee
Poor workmanship: Most insurance policies won't cover you for events that are caused by incompetence, although professional indemnity will cover you for some types of negligence
Drugs or alcohol: If you or your employees were under the influence when the event you want to claim for occurred
Damage to property being worked on: Some policies won't cover damage to a person's property caused while you are working on it
Wear and tear: Insurance won't pay out for damage or breaking of tools or equipment that are the result of general wear and tear
Breach of contract: Some types of insurance will exclude cover for costs arising from you breaching a contract
Improper use of business vehicles: If you're using vehicles for work purposes without declaring that to your insurer, or if the person driving is not covered by the policy
The best contractor insurance will be a policy that provides the right cover for you and your business which is affordable. You don’t legally need insurance, unless you hire other people, but it can be extremely useful.
As there are so many policies on the market, it’s important to compare prices and to shop around before you buy.
If you are a contractor and you hire someone else, you will need employers’ liability insurance. However, most contractors are hired by a company or third party and therefore won’t need to buy this cover.
Most UK workers, including contractors, are given a tax-free allowance of £12,570 before they start earning tax. Anything they earn over this amount will be taxed at the standard rates.
The only insurance you legally need to start a business is employers’ liability insurance if you are hiring other workers. However, there are lots of other policies that can be useful financially when you start a business.
These include policies to protect your business building, equipment and stock and cover for legal claims made against you.
Contractors can sometimes access the same benefits as full-time employees such as sick pay, but this isn’t always the case.
There were 33.7 million working days lost in 2022-23 due to work-related illness and workplace injury, and if you don’t have an employer to fall back on, you’ll be left covering the cost of your lost income.
This is where insurance can be a financial lifeline for contractors if they are too ill to work. However, it also covers lots of other things too, from lost or damaged stock or equipment to compensation claims.
Rebecca Goodman Personal Finance & Insurance Expert
MoneySuperMarket has won the Feefo Platinum Trusted Service Award, an independent seal of excellence, which recognises businesses that consistently deliver a world-class customer experience.
Self-employed contractors usually don’t need to buy insurance but it can be a useful financial tool. In some cases a customer or client may request that you have insurance before they will hire you.
It can also cover them for missed income, if they’re ill or injured, and it can also pay out for compensation costs, if someone makes a claim against them.
You may need professional indemnity insurance, if your employment contract does not include it. This can happen if you want to join a professional body or if a customer will only hire you if you have it. This can happen with some contracts and professions, including architecture and law.
Even if it’s not required, professional indemnity insurance can be useful as it can protect you if someone makes a claim against you for work you’ve carried out.
Self-employed workers and contractors are very similar. However, usually a contractor tends to take on fixed-term contract work, where they are treated as an employee, which may last for a few weeks or months.
A self-employed worker on the other hand usually has a little more flexibility, working on lost of different projects for clients and customers.
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One of the best ways to get the lowest prices and best deals is to compare quotes from different companies. We do the work for you, comparing quotes side-by-side and giving you all the information you need so you can choose the right deal for your needs and your wallet.
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Our goal is to search deals from as wide a range of companies as possible so that you can choose the deal that suits you.
No, at this time business insurance is not an eligible product for unlocking our SuperSaveClub rewards. It is also not included in our Price Promise.
According to Simply Business data, 10% of customers paid this amount or less monthly for a domestic flooring contractor insurance policy. Figure based on annual policies purchased in 2024.
Simply Business is one of the UK's leading providers of business insurance, serving 1 million customers across 1,500 trades.
Source: Gov.uk
Source: UK Government's Construction Statistics in Great Britain Report 2024
Simply Business data 2024
YouGov Survey 1st October 2023 to 30th September 2024. Net recommended score derived from “Which of the following online service website would you recommend to a friend or colleague, or tell them to avoid?” Base: Current Customers of (MoneySuperMarket n=19272, CompareTheMarket n=17631, Go.Compare n=10457, Confused.com n= 8421, Uswitch n=681)
From 01.06.23 to 31.05.24 MoneySuperMarket customers received £1.59bn estimated savings based on (i) SuperSaveClub reward redemptions, and (ii) savings claims per product multiplied by the number of sales. Products included - Car, Home, Pet and Travel insurance, Broadband, Credit Cards, Loans and Mortgages.
According to Simply Business data, 10% of customers paid this amount or less for an annual domestic flooring contractors insurance policy. Figure based on policies purchased in 2024.
According to Simply Business data, 51% of customers paid this amount or less for an annual domestic flooring contractors insurance policy. Figure based on policies purchased in 2024.
According to Simply Business data, 10% of customers paid this amount or less for an annual IT contractor insurance policy. Figure based on policies purchased in 2024.
According to Simply Business data, 51% of customers paid this amount or less for an annual IT contractor insurance policy. Figure based on policies purchased in 2024.
According to Simply Business data, 10% of customers paid this amount or less for an annual plumbing, heating and ventilation contractor insurance policy. Figure based on policies purchased in 2024.
According to Simply Business data, 51% of customers paid this amount or less for an annual plumbing, heating and ventilation contractor insurance policy. Figure based on policies purchased in 2024.
Average claims value for MoneySuperMarket customers who claimed on their business insurance in the last 12 months. Data provided by SimplyBusiness.
88% of business insurance claims made by MoneySuperMarket customers were accepted in the 12 months before March 2025. Data from SimplyBusiness.
