Most tradespeople know they need some kind of insurance, but working out which types you actually need — and which overlap — is where it gets confusing. Public liability, employers liability, professional indemnity: they sound similar but they cover completely different things.
This guide compares all three side by side, explains what each one does, who legally needs it, and roughly what it costs. By the end, you’ll know exactly which policies your trade business needs.
Key Takeaways
- Public liability insurance (PLI) covers injury or property damage to clients and the public — it’s not legally required but almost always expected on site
- Employers liability insurance (EL) is legally required if you employ anyone, including labour-only subcontractors; minimum cover is £5 million
- Professional indemnity insurance (PI) covers financial losses caused by your advice or designs — most tradespeople doing physical work only don’t need it
- Trading without EL insurance when it’s required costs £2,500 per day under the Employers’ Liability (Compulsory Insurance) Act 1969
- Most insurers bundle PLI and EL into a combined tradesman policy — you rarely buy them separately
The Quick Comparison
| Insurance Type | What It Covers | Legally Required? | Who Needs It |
|---|---|---|---|
| Public Liability (PLI) | Injury or property damage to clients or the public | No | Virtually all tradespeople |
| Employers Liability (EL) | Injury or illness suffered by employees | Yes (if you employ anyone) | Any tradesperson with staff |
| Professional Indemnity (PI) | Financial loss from bad advice, designs, or recommendations | No | Tradespeople who give advice or designs |
| Tool Insurance | Theft or accidental damage to your tools | No | Tradespeople with significant tool investment |
| Van Insurance | Damage, theft, or liability involving your vehicle | Yes (any road vehicle) | Anyone with a trade vehicle |
Public Liability Insurance (PLI)
Public liability insurance covers your legal costs and any compensation you’re ordered to pay if someone is injured or has their property damaged as a result of your work. The “public” in public liability refers to anyone outside your business — clients, bystanders, and third parties.
What It Actually Covers
- A client trips over your kit bag and breaks their wrist
- You accidentally smash a customer’s bathroom tiles while carrying materials through
- A pipe you fitted fails a week later and causes water damage to the floor below
- A passer-by is hit by debris from your work on a scaffold
What It Doesn’t Cover
- Your own employees getting injured (that’s employers liability)
- Your tools being stolen (that’s tool insurance)
- Any financial loss from bad advice you gave (that’s professional indemnity)
Typical Costs
| Cover Level | Typical Annual Premium |
|---|---|
| £1 million | £80–£150 |
| £2 million | £100–£200 |
| £5 million | £130–£280 |
| £10 million | £200–£450 |
Premiums vary by trade, turnover, and claims history. According to Simply Business, sole trader electricians pay an average of around £120 per year for £1 million PLI; roofers typically pay more (£180–£300) due to the higher-risk nature of the work.
Is It Legally Required?
No. But don’t let that fool you — most commercial clients, contractors, and housing associations won’t let you on site without evidence of at least £1 million PLI cover. Many local authorities and larger clients ask for £5 million or £10 million.
It’s not a legal requirement, but it’s effectively a commercial requirement for most regular trade work.
Employers Liability Insurance (EL)
Employers liability insurance covers your legal costs and compensation payments if an employee suffers injury or illness as a result of working for you. Under the Employers’ Liability (Compulsory Insurance) Act 1969, it’s a legal requirement for any UK business that employs people.
Who Counts as an Employee?
This catches more tradespeople out than anything else. According to the Health and Safety Executive (HSE), you must have EL insurance for anyone who:
- Works under your direction and control
- Uses your equipment or works at your premises
- Works exclusively for you (can’t take on other jobs at the same time)
Labour-only subcontractors — often called LOSCs — frequently count as employees under this definition, even if they’re not on PAYE. If someone turns up to your site, uses your tools, works your hours, and only works for you, your insurer will likely treat them as an employee. Get clarity before assuming you’re exempt.
Sole Traders Working Alone
If you’re a sole trader working by yourself with no staff, you don’t need EL insurance. That exemption disappears the moment you take on anyone, even a part-time labourer for a single job.
The Cost of Getting It Wrong
Trading without EL when you legally need it: £2,500 per day. That’s the fine set out in the 1969 Act, still current as of 2026. The HSE enforces it.
Typical Costs
| Trade | Typical EL Premium (Annual, 1 Employee) |
|---|---|
| Electrician | £150–£300 |
| Plumber | £180–£350 |
| Builder / General Contractor | £200–£500 |
| Roofer | £250–£600 |
Most insurers bundle EL with public liability — a combined tradesman policy typically costs £200–£700 per year for a sole trader with one or two employees depending on trade type and turnover.
Minimum Cover
The legal minimum is £5 million, but most policies default to £10 million. Always check the certificate your insurer provides — it must show at least £5 million to be legally compliant.
Professional Indemnity Insurance (PI)
Professional indemnity insurance covers your legal costs and compensation payments if a client claims that advice, designs, or recommendations you gave caused them financial loss. It’s distinct from both PLI and EL — it applies to the professional side of what you do, not the physical work.
When PI Applies
The clearest examples for tradespeople:
- You tell a client their existing joists can support a new mezzanine. They turn out to be structurally inadequate. The client sues you for the cost of putting it right.
- You produce kitchen layout drawings as part of a design-and-build contract. The layout turns out to be non-compliant with Building Regulations. The client claims for the redesign costs.
- You advise a client that a heating system can serve a planned extension. It can’t. They claim for the cost of upgrading it.
Who Needs PI?
Most tradespeople carrying out physical work to a client’s specification don’t need professional indemnity insurance. You’re more likely to need it if you:
- Provide design services (kitchen, bathroom, loft, structural)
- Act as a project manager and specify materials or systems
- Produce written surveys, reports, or recommendations clients rely on
- Work as any kind of consultant alongside the physical work
If you only do what you’re told and work from drawings produced by others, you almost certainly don’t need PI.
Typical Costs
According to GoCompare, median annual PI premiums for tradespeople are around £90–£150 per year for £100,000 of cover, rising to £200–£400 for £500,000 cover. Premiums depend heavily on the volume and complexity of the advice or design work involved.
Which Combination Do You Need?
| Your Situation | Insurance You Need |
|---|---|
| Sole trader, no employees, physical work only | PLI |
| Sole trader, no employees, gives design advice | PLI + PI |
| Any employees or labour-only subcontractors | PLI + EL |
| Employees and you give design or advisory services | PLI + EL + PI |
Most tradespeople fall into the first or third row. The second and fourth rows apply if you offer any kind of design or specification service alongside physical work.
Combined Policies: What to Look For
Most insurers offer combined tradesman policies that bundle PLI and EL together. Some include tool insurance too. When comparing:
- Check the PLI limit — £1m, £2m, £5m, or £10m. What does your typical client or main contractor require?
- Check the EL limit — minimum £5m, most policies offer £10m
- Check what triggers a claim — some policies have exclusions for certain materials (asbestos, contaminated land) or work types (work over 3 storeys, diving, demolition)
- Check the excess — the amount you pay on each claim before the insurer covers the rest. A £250 excess is standard; some cheaper policies have £500 or £1,000.
- Check the run-off period for PI insurance — claims can be made years after the work was done, so make sure cover extends to past work when you renew or cancel
Frequently Asked Questions
Do I need public liability insurance by law? No, PLI isn’t a legal requirement for UK tradespeople. But most commercial clients, main contractors, and housing associations won’t let you on site without a valid PLI certificate. For most trades, it’s effectively a commercial necessity even if the law doesn’t mandate it.
What’s the difference between employers liability and public liability? Public liability covers injury or property damage to clients and the public. Employers liability covers injury or illness suffered by people who work for you. They protect against different types of claim and you may need both if you have employees.
I use subbies, not employees — do I still need EL insurance? Possibly. If your subcontractors work exclusively for you, use your equipment, and work under your direction, the Health and Safety Executive may treat them as employees for EL purposes. Check with your insurer before assuming you’re exempt.
Can I buy PLI and EL together? Yes — most insurers offer combined tradesman policies. Buying them together is usually cheaper than separate policies and simpler to manage. Many policies also include tool insurance in the bundle.
Does professional indemnity cover me if a job I completed goes wrong? Not in the way you might expect. PI covers financial losses caused by your professional advice, design, or recommendations — not faulty workmanship. If a pipe you installed leaks or a wall you built cracks, that’s a PLI claim (property damage), not a PI claim. PI is only triggered when the claim is about advice or a design you provided.
Building Your Trade Business
Getting your insurance right is one part of running a professional trade business. Another is making sure clients can find you in the first place. A well-built website gives you somewhere to display your insurance credentials, show your work, and capture enquiries from people searching Google for tradespeople in your area.
Digital Tradies builds professional websites for UK tradespeople from £49/month — no upfront cost, live in 3 days. It’s worth taking a look if your online presence doesn’t yet match the quality of your work.
