Nine things to check on a trade insurance quote

Two quotes can carry the same headline limit and behave very differently when a claim arrives. Price is the easiest thing to compare and the least useful on its own. Work through this list with the policy schedule and wording in front of you.

1. Who is actually providing it?

The name on the website may be a broker or a comparison service, not the insurer. Find both names, then look them up on the FCA's Financial Services Register, a public record of authorised firms.¹ For employers' liability, using an authorised insurer is a legal requirement.²

2. Does it describe your work correctly?

Check the trade description word for word. A policy written for 'painter and decorator' may not suit someone who also does roofing repairs. Commercial customers have a legal duty to make a fair presentation of the risk,⁴ so disclose all the work you do, not only your main trade.

3. Are there limits on how you work?

Look for conditions on working height, depth, heat or specific materials. These are often easy to miss and can matter more than the premium. If you use a blowtorch or work on roofs, ask directly whether that is covered and on what terms.

4. How much is the limit, and how does it apply?

Check whether the limit applies to each claim or is a total for the policy year. Compare it with what your contracts require. For employers' liability, the legal minimum of £5 million includes costs.²

5. What is the excess?

A low premium can hide a high excess, particularly on property damage. Employers' liability works differently. Your insurer must pay the full compensation to the employee, although you can agree to reimburse the insurer for part of it afterwards.² Check whether your policy includes that kind of agreement.

6. How are subcontractors treated?

Many policies set conditions on subcontractors, such as requiring them to hold their own cover. If you cannot meet a condition on a real job, it may cause problems at claim time. Ask what evidence the insurer expects you to keep.

7. Are tools and works included?

Liability cover does not replace your own property. Check whether tools are included, whether they are covered when left in a van overnight, and whether work in progress is protected.

8. What does paying monthly really cost?

Compare the total for twelve months, not the monthly figure. Monthly payments can be a credit agreement with interest. Check the fees for cancelling or changing the policy mid-term as well.

9. What happens if the insurer fails?

The Financial Services Compensation Scheme can step in if a PRA-regulated insurer fails. For valid claims it lists employers' liability at 100% and public liability at 90%.³ There is a catch for bigger firms. FSCS says businesses with annual turnover above £1 million are not eligible for general insurance claims.³