Maintaining contractors insurance in lockdown

The UK’s lockdown to slow the spread of COVID-19 has left many contractors facing severe disruption and uncertainty, with many seeing their workload much reduced, or forced to stop work temporarily.

The result for some is significantly reduced income and the need to carefully manage costs, which may lead to questions about insurance. At first glance they are perfectly understandable questions, like “My business is closed, why do I need insurance?”, “Is insurance a financial burden that I could do without?”, and “Does my insurance even cover me if I continue to work during the pandemic?”.
But the truth is, whether you’re continuing to work or not, maintaining your contractors insurance cover is as important as ever, rather than taking the risk and leaving yourself exposed.

Here are five reasons to maintain an insurance safety net during lockdown:

Protect the property, tools, and vehicles you own: Whether you’re working less or not at all during lockdown, it’s vital to maintain insurance cover for the tools, premises, stock, and vehicles you own. An incident occurring now, such a theft, could mean it takes you longer to get back to normal once the restrictions start to ease if you don’t have insurance in place. Even if your premises are temporarily unattended, or your vehicle is laid up, they’ll still be covered as long as you follow any recommendations from your insurer. The question is, if you lost your tools, vehicle, premises, or stock would you be able to recover without insurance to help with the cost?
Make sure you’re covered for liability claims: Public liability insurance is there to protect you if a customer or member of the public makes a claim against your business, for instance claiming an injury has been caused by faulty wiring you installed. If you are still providing emergency services during the COVID-19 outbreak, your public liability insurance with NICEIC and ELECSA Insurance Services will still be valid as long as you are following the latest government advice – such as social distancing, wearing a mask and gloves, and disinfecting surfaces. Remember too that your continued NICEIC or ELECSA membership requires you have public liability insurance in place.
Employers liability insurance remains a legal requirement: If you employ people even on a part-time basis you are still legally required to have employers liability insurance in place, even if they are not currently working every day – in fact, you could face fines of up to £2,500 per day that you don’t have cover in place*. It’s worth remembering that this cover helps with things like legal defence costs and compensation if an employee is injured or falls ill at work. Could you afford to cover these costs yourself if something were to go wrong?
You won’t be covered for historical professional indemnity claims if you don’t have cover in place: Professional indemnity is there to protect you if a customer makes a claim against your business alleging an error or omission in your professional advice and services. However, it’s important to be aware that, even if you aren’t currently working, if someone puts in a claim for work you did previously, you must have the correct cover in place at the time a claim is made against you, regardless of when the work in question was undertaken – otherwise you could be left facing potentially ruinous legal fees and compensation costs.
Cost needn’t be the barrier you might think it is: There are ways to cut or spread the cost of insurance. For instance, at NICEIC and ELECSA Insurance Services, we offer NICEIC and ELECSA registered contractors a 10% discount on the cost of contractors insurance** – and we can offer a monthly payment plan to spread the cost, thanks to our relationship with finance provider, Close Brothers.

If you are about to take out new cover or renew, please do let us know as we can see whether the reduced risk you may be facing, for instance due to short term closure or a reduced workload, may affect your premium. However, it’s crucial that you revisit your cover again once things start to return to normal, to make sure you are properly protected. If you are underinsured, this could lead to a claim not being paid out in part or full.

Further Information and Advice
We have a great deal of advice and information on our website to support businesses during the Coronavirus, please take a look at our COVID-19 resource hub including frequently asked questions.

If you need to speak with us, please call the NICEIC and ELECSA Insurance Services team on 0333 015 6629.

To view our webinar: Working During The Pandemic – What You Need To Know About Insurance click here

* https://www.gov.uk/employers-liability-insurance

** https://www.niceic-and-elecsa-insurance.com/business-insurance/electrical-contractors-insurance/