Contractors face different risks depending on the work they do.
A self-employed tradesperson will not always need the same cover as a larger contractor with staff, vehicles, subcontractors and commercial projects.
But there are some types of insurance that many contractors should consider.
This guide explains the main types.
Why contractor insurance matters
Contractor work carries real risk. HSE figures show that, across Great Britain in 2024/25, 680,000 workers sustained a workplace injury, while 59,219 employee injuries were reported under RIDDOR.
Slips, trips and falls made up 30% of non-fatal employee injuries reported under RIDDOR in 2024/25, while handling, lifting or carrying accounted for 17%. These are common risks across construction, trade and contractor environments.
Public liability insurance
Public liability insurance is one of the most common types of contractor insurance.
It can help protect your business if someone is injured, or if their property is damaged, because of your work.
For example, a customer could trip over equipment. You could damage a wall, floor, pipe, cable or neighbouring property. Or work on site could cause injury to a visitor or member of the public.
Public liability insurance can help cover compensation claims and legal costs.
It is not usually a legal requirement. But many clients and main contractors will ask for proof of cover before letting you start work.
For many contractors, this is one of the first policies to put in place.
Employers’ liability insurance
Employers’ liability insurance is required if you employ staff.
This can include full-time employees, part-time employees, temporary workers and some labour-only subcontractors.
It can help cover claims if someone working for you becomes injured or ill because of their job.
For contractors, this is important because site work can involve tools, materials, manual labour, machinery and other hazards.
If you have anyone working for you, it is important to check whether employers’ liability insurance is needed.
Contractors all risk insurance
Contractors all risk insurance can help protect work in progress.
This is often known as contract works cover.
It may cover damage to the work you are carrying out before the project is complete. Depending on the policy, it may also cover materials, tools, hired-in plant or own plant.
This can be useful for builders, construction firms and contractors working on larger projects.
For example, if materials are damaged or part of the project is affected by fire, flood, theft or vandalism, contractors all risk insurance may help with the cost.
Public liability insurance and contractors all risk insurance are not the same.
Public liability focuses on injury or damage caused to third parties. Contractors all risk focuses more on the work, materials or plant linked to the project.
Professional indemnity insurance
Professional indemnity insurance may be needed if you provide advice, design, plans, specifications or professional guidance.
Some contractors think this only applies to architects or consultants. But it can also apply to building contractors, electrical contractors, design and build firms, and other specialists.
If a client claims they lost money because of your advice, design or specification, professional indemnity insurance may help.
This can be important if your work includes:
- Design responsibility
- Technical advice
- Project management
- Drawings or specifications
- Recommendations on materials or systems
- Design and build contracts
Some contracts will ask for professional indemnity insurance before work begins.
Tools and equipment cover
Contractors often rely on tools every day.
If tools are stolen, lost or damaged, it can stop work and create extra costs.
Tools cover can help protect the equipment you use for work. This may include hand tools, power tools and other trade equipment.
You should check where and when tools are covered. Some policies have rules about tools left in vans overnight, storage, security and proof of ownership.
Commercial vehicle or fleet insurance
If you use a van, pickup or other vehicle for work, you need the right vehicle insurance.
A standard personal policy may not cover business use.
Contractors with several vehicles may need commercial fleet insurance. This can help cover multiple vans or vehicles under one policy.
This may be useful for building firms, electrical contractors, roofing companies, plumbing businesses and other trade firms with more than one vehicle on the road.
Commercial combined insurance
Commercial combined insurance brings several types of business cover into one policy.
This can be useful for contractors with more complex insurance needs.
A commercial combined policy may include public liability, employers’ liability, property cover, business interruption, stock, tools, plant or other options.
The exact cover depends on the policy.
It can be a practical option for contractors who want several covers arranged together.
Legal expenses insurance
Legal expenses insurance can help with certain legal costs linked to running a business.
This may include employment disputes, contract disputes, debt recovery or legal advice.
For contractors, disputes can happen around payment, contracts, staff, subcontractors or project issues.
Legal expenses insurance will not cover every legal problem. But it can be useful support when covered disputes arise.
Directors and officers insurance
Directors and officers insurance, often called D&O insurance, can help protect company directors and senior decision-makers.
It may help if claims are made against them personally for decisions made while running the business.
This may be relevant for limited companies, construction firms and larger contractor businesses.
It is not always needed by every contractor. But it can be worth considering if you run a company and make decisions that affect staff, clients, finances, contracts or health and safety.
What insurance does a self-employed contractor need?
A self-employed contractor may need public liability insurance as a starting point.
They may also need tools cover, commercial vehicle insurance and professional indemnity insurance, depending on the work they do.
If they use labour-only subcontractors or employ anyone, employers’ liability insurance may also be needed.
Even small contractors can face large claims, so it is worth checking cover before starting work.
What insurance does a building contractor need?
A building contractor may need several types of cover.
This could include public liability insurance, employers’ liability insurance, contractors all risk insurance, tools cover, plant cover and professional indemnity insurance.
The right cover depends on the size of the business, the type of projects, contract terms and whether staff or subcontractors are used.
A contractor working on commercial sites may also need to meet specific client insurance requirements.
How do you know what cover is right?
Start with how your business works.
Think about:
- The type of work you do
- Whether you work in homes, commercial sites or public areas
- Whether you employ staff
- Whether you use subcontractors
- Whether you provide advice or design
- The value of your tools and equipment
- The contracts you want to win
- The level of cover clients ask for
This will help shape the right insurance package.
Speak to CHAS Insurance
CHAS Insurance helps contractors arrange insurance that fits the way they work.
Whether you are self-employed, run a trade business, or manage larger contractor projects, we can help you review your options.
Speak to the CHAS Insurance team to discuss contractor business insurance.