02 Dec Tradesman Insurance a Factor in Business Viability Struggle
Tradesman Insurance a Factor in Business Viability Struggle
A full armoury of business insurance cover, from public, product and employers’ liability through to professional indemnity and more niche forms of cover, should be considered as essential for any tradesman looking to establish a business in the UK.
Those tradesmen who do not obtain adequate tradesman insurance cover risk falling by the wayside and going out of business before they have even had a chance to properly get off the ground – joining the 23% of tradesman businesses in the UK who fail before they have even achieved two years of trading.
However, new research has revealed that there is lots of regional variation when it comes to the chances of successfully establishing a trade business over the long-term, with areas in the Midlands – for example, Leicester, Nottingham and Birmingham – all offering two-year success rates of around 90%. This compares favourably to most other regions in the UK, including London, where start-up trade businesses have a survival rate of only 84.1%. This may be explained by the fact that competition is fierce in the capital; there are currently 7,649 trade businesses operating within the area.
In contrast, the Welsh capital, Cardiff, has only 1,457 trade businesses, meaning that there may be more room for start-ups, particularly roofing and double-glazing businesses, which enjoyed 100% two-year survival rate in the city.
But it is not only in Cardiff that double-glazing tradespeople are able to get off the ground so successfully; alongside electricians they have the highest average survival rate over a two-year period (89%). Start-up roofers, in contrast, have the lowest survival rate, with only 78% of start-ups succeeding.
However, the day rates enjoyed by electricians and double-glazers contrast sharply; electricians may earn an average of £215 a day, but double-glazing installers earn a flat-rate of £150 a day.
Meanwhile, starting a roofing business could be a risk, as the trade has the lowest survival rate (78%), although the situation is different for roofers in Sheffield, Nottingham and Cardiff, with new roofers in the city achieving a 100% survival rate.
Insurance costs a factor
Tradesman insurance costs are an essential consideration for any start-up. Builders pay the most each year for their public liability insurance (£278), followed by plumbers (£217) carpenters (£126) and, at the opposite end of the spectrum, electricians (£81). Tredstone will compare quotes and help you find the cost-effective cover that is perfect for your business.