🔹 Introduction
Whether you’re laying bricks, installing electrics, or managing entire builds, insurance is non-negotiable in the UK construction industry. It’s not just about ticking boxes—it’s about protecting your business, your team, and your livelihood from unexpected accidents, claims, or legal issues.
In this guide, we break down the essential types of insurance for UK contractors, what each policy covers, and how to make sure you’re fully protected and client-ready.
🔹 Why Insurance Matters for Contractors
- Protects you from claims and lawsuits
- Required for most commercial and public contracts
- Gives clients and main contractors confidence
- Ensures you stay compliant with UK legal obligations
Without the right cover, a single incident could wipe out your business financially.
🔹 Core Insurance Types Every Contractor Should Have
| Insurance Type | What It Covers |
|---|---|
| Public Liability Insurance | Injury to others or property damage |
| Employers’ Liability Insurance | Injury or illness to employees (legal requirement) |
| Contract Works Insurance | Damage to ongoing building work |
| Tool Insurance | Theft or damage to tools/vans |
| Professional Indemnity | Design errors, advice that causes client losses |
| Personal Accident Cover | Income support if you’re injured on or off site |
💡 Some contracts will not even consider you without proof of public liability and employers’ liability insurance.
🔹 Required Insurance by Law
- Employers’ Liability is legally required if you employ anyone—even a part-time apprentice
- Must be at least £5 million in cover
- Must display your certificate on-site
Failing to comply can result in fines up to £2,500 per day.
🔹 Insurance When Working Under CIS
As a CIS subcontractor, you are self-employed in HMRC’s eyes, which means:
- You’re responsible for your own insurance
- Clients may demand proof of cover before letting you on-site
- You may need to show tax status and insurance to be verified
🔹 Specialist Add-ons to Consider
- Hired-in plant insurance: Covers rental equipment
- Legal expenses cover: For disputes with clients or suppliers
- Business interruption insurance: Covers lost income due to unexpected events
- Van insurance (with tool cover): Ensure tools are covered overnight and in transit
🔹 Insurance Costs for Contractors
Premiums vary based on:
- Your trade (e.g., roofing is higher risk than painting)
- Number of employees
- Annual turnover
- Equipment value
🧮 Average public liability costs range from £80–£400/year for sole traders, and £600+ for larger teams.
🔹 Where to Get Contractor Insurance
- Specialist brokers (e.g., Simply Business, Trade Direct, Rhino)
- Construction trade bodies (e.g., FMB, NICEIC) offer member discounts
- Comparison sites for public liability and tool cover
💡 Always check policy exclusions—many policies won’t cover working at height, heat, or hazardous locations unless specified.
🔹 FAQs
Do I need insurance if I’m a one-man band? Yes—at a minimum, public liability and tool cover protect you from claims and theft.
Is tool insurance worth it? Yes—tools are a prime target for theft. Make sure the cover includes overnight theft from locked vehicles.
Can I get monthly insurance? Yes—some brokers offer pay-monthly policies, but check if they’re annual contracts split monthly or flexible short-term cover.
🔚 Final Thoughts
Insurance isn’t just admin—it’s the safety net that keeps your business alive when things go wrong. With the right policies in place, you can win more work, meet legal requirements, and operate with total peace of mind.
Need help reviewing or arranging your contractor insurance? Speak to our construction finance and compliance team today and let’s make sure you’re fully protected.