More than a quarter of UK sole traders could be leaving themselves financially exposed by operating without any business insurance.

New research commissioned by the Association of British Insurers (ABI) found that 28% of sole traders surveyed reported having no insurance policies at all.

For tradespeople and contractors, this could mean taking on significant financial risks personally if something goes wrong.

Why Are Small Businesses Underinsured?

The report found that underinsurance is commonly caused by three things:

  • Business owners not fully understanding their insurance
  • Choosing a lower level of cover than the potential risk
  • Failing to update insurance as the business changes

Only around half of respondents had reviewed either their insurance products or their level of cover within the previous 12 months.

This can be particularly important for trades businesses, where the type and value of work undertaken can change quickly.

Taking on larger contracts, employing staff, buying new equipment or adding services could all change the level or type of insurance your business requires.

Do You Have Enough Public Liability Insurance?

Public liability insurance was one of the most common forms of business insurance identified in the study, but only 57% of SMEs surveyed said they held it.

For builders, roofers, landscapers, groundworkers and other contractors working at customer properties or on construction sites, public liability insurance can provide protection against claims involving third-party injury or property damage.

Clients and principal contractors may also require a particular level of public liability cover before allowing you to begin work.

Having a policy therefore isn’t always enough. You also need to make sure the level of cover remains appropriate for the work you are doing.

When Did You Last Review Your Business Insurance?

Your insurance should change as your business changes.

It may be worth reviewing your cover if you have recently:

  • Started offering additional services
  • Taken on employees or subcontractors
  • Won larger contracts
  • Started working on construction sites
  • Purchased more expensive tools or machinery
  • Increased your turnover
  • Taken on work with higher insurance requirements

The ABI-backed research highlights a clear gap between many SMEs believing they understand their insurance and ensuring that their actual level of protection remains suitable.

Make Sure Your Business Has the Right Cover

At CHAS Insurance, we specialise in arranging business insurance for tradespeople and contractors.

Whether you’re a builder, roofer, groundworker, landscaper or other trade professional, we can help you review your existing insurance and identify whether your current cover reflects the work you actually carry out.

Speak to the CHAS Insurance team today to discuss your business insurance requirements.