If you are a self-employed, tradie, you really should have your own public liability insurance, because if you don’t and something happens as a result of your work activities, you can end up having to pay out tens of thousands of dollars, or even more.
Whether you are a carpenter, plumber, electrician or any other type of trade contractor, it is really recommended you protect yourself and your business with public liability insurance, and here’s why.
Why it is crucial for subbies to have insurance
There are a number of reasons why it really is essential for sub-contractors to have their own tradie insurance:
- In case your work activities cause damage to someone else’s property
- In case your work activities cause personal injury to someone not employed by you
- To get on site. Many clients will not let a subbie on site without their own current public liability insurance.
- In some situations, and some states, it is a legal requirement for all self-employed tradespeople to have adequate liability insurance cover.
Expanding on the above points in more detail, a self-employed tradie can be held accountable for any wrongdoing or accidents caused directly or indirectly as a result of their work activities.
With public liability insurance cover, most of the costs of such incidents may be covered.
While many tradies tend to think of themselves as workers, rather than an as a small business, the legal system sees things differently. For example if you are an electrician who is a sole trader and think of yourself as “sparkie” you have similar legal responsibilities and liabilities to third parties as any other business – large or small.
For many tradies, while it is may not be compulsory to have public liability insurance, you may need a current policy to get on site , as in many situations the client will insist on adequate public liability insurance cover from every subbie on the site . Many principal builders , service providers , councils, companies, property owners and government departments will not let a subbie on site without their own current public liability insurance. Further some trades have mandatory public liability cover requirements, and you cannot operate legally without providing proof of that cover. For instance, in Victoria, all Plumbers must have the Victorian plumber endorsement warranty before they can operate.
If you have any further questions on why it is crucial for subbies have suitable third party liability insurance an insurance broker may be able to answer them.
Do tradies get sued?
When you talk to sub-contractors, many of them think that it highly unlikely they will be sued , as they know the people they work for and trust them, so who would ever sue them ?
This thinking doesn’t take into account the legal process and unknown third parties. Once a lawyer is involved in any disagreement things change, and often neither party is really in control any more. A lawyer’s objective is often to gain the biggest settlement possible for their client.
Lawyers representing clients and aggrieved third parties often sue anyone even remotely connected to a given incident, including sub-contractors, sometimes even when they are only tenuously linked to the issue.
A tradie who is in this situation without public liability insurance will suddenly find themselves having to pay for a defence, even if they don’t think they have a casse to answer for ; plus cover the costs of any damages that they are ruled liable for. With suitable liability cover though, most of these costs may be covered.
Also, if you are self-employed tradie it is important to remember that you are responsible for personal injury to someone not employed by you and damage to someone else’s property. That means you may be liable for claims made by a passer-by that slips or to a neighbour whose property you have damaged. In the course of their work a typical tradie may cross paths with hundreds , if not thousands, of people every year ; and these people could potentially take action against them – justified or not.
Getting Public Liability Insurance for Tradies
The public liability insurance market in Australia is robust, so for tradies there are a number of methods to get public liability cover.
The first is to purchase a policy direct from an insurance company or online from an business insurance broker.
The second way is to contact an insurance broker an ask them to help you find a suitable and affordable public liability insurance to cover your work activities.
Either way can give sub-contractors the essential cover they need.
Subbies should note that each insurance policy is different and includes exclusions that are not covered by public liability insurance.
If you are unsure if a policy covers you for your work activities and risk profile it is suggested you talk to insurance broker and discuss your activities and risks and find cover that is suitable and affordable.
Public Liability is not the only insurance subbies need
Tradies and the self-employed may also need several other insurances as they carry out their work, including:
- Commercial Motor Insurance
- Workers Compensation Insurance
- Personal Accident Insurance
- Tool Insurance
- Complete Business Insurance Pack
If you are a sub-contractor contact us at Smart Business Insurance to learn more about keeping your trade business and personal assets safe with public liability insurance.