How Much Does Insurance Actually Cost a Tradesperson?
Public liability insurance for most trades runs from roughly £100 to £400 a year depending on cover level and trade risk, while tool insurance, van insurance, and income protection add further cost on top. For a working tradesperson, total annual insurance spend often lands somewhere between £500 and £2,000, which is easy to underestimate when pricing jobs.
Why Do So Many Tradespeople Forget to Price for It?
Insurance is an annual, lump-sum cost, which makes it easy to mentally separate from day-to-day job pricing. Unlike materials, it doesn't show up as a line item on any single invoice, so it's easy to treat as a background cost rather than something that needs to be baked into your hourly or day rate.
How Do You Actually Build It Into Your Prices?
Take your total annual insurance cost and divide it by your billable days for the year, which gives you a daily cost to add on top of your baseline rate. For most tradespeople this works out to somewhere between £3 and £10 a day, a small enough number that it rarely affects competitiveness but adds up to real money over a full year if left out.
What Other Hidden Costs Should Be Priced the Same Way?
Certification renewals, tool replacement, accountancy fees, and even the unpaid hours spent quoting and driving between jobs all deserve the same treatment. Add up your true annual overhead, divide by billable days, and you get a realistic daily cost figure that should sit underneath every quote you send, whether customers see it broken out or not.
Frequently Asked Questions
Is public liability insurance a legal requirement for tradespeople?
It's not always a strict legal requirement, but most customers and many platforms like Checkatrade or MyBuilder expect to see proof of it, and it protects you financially if something goes wrong on a job.
Should I show insurance as a separate line on quotes?
Not usually. It's easier and more normal to fold it into your day rate or hourly rate rather than itemising it separately, which can make quotes look cluttered.
How do I calculate my true daily overhead cost?
Add up annual insurance, certifications, tool replacement, and admin costs, then divide by the number of days you actually expect to bill in a year, not calendar working days.