As a busy tradie, you may not give much thought to your insurance cover. However, it’s essential that you take the time to protect your risk exposures. One of the most common (and most essential!) forms of insurance cover that you should consider as a tradie is public liability insurance. If you don’t have it in place yet, chances are that you need to get it sorted! Let’s take a look at exactly what you need to know about public liability insurance.
What is public liability insurance?
Public liability insurance is designed to protect you financially if you cause damage to third party property or injury to a third party as a result of your actions at work. It also covers the cost of legal bills if you need to hire a lawyer as part of the claims process. When you consider that a liability claim could see you having to pay for expenses such as repairs, replacements, medical bills and rehabilitation costs, it’s easy to see why liability insurance is important.
Why is public liability insurance important?
The majority of Australian businesses require public liability insurance but it’s especially important for tradies. This is because you work in a higher risk industry where there is an increased chance of things going wrong. From damaging client property or vehicles on a work site to a passer-by tripping in your equipment, you face numerous risk exposures. Public liability insurance ensures that you have the right cover in place for ongoing peace of mind. Tradies are often subcontractors which means that unlike other professions, you can’t rely on your employer to provide cover. Instead, you need to be on top of your own insurance cover.
Does public liability insurance cover subcontractors?
In most cases, subcontractors will need to obtain their own public liability insurance so employers should always check that they have cover in place. If you work as a subcontractor, never assume that you’re covered by an employer when they take you on – you generally need to take out your own policy. Without liability insurance in place, if you cause third party damage or injury it means that you’ll be liable for the related expenses. Employers also need to be aware that there may be some situations where subcontractors are considered ‘workers’ and will therefore need to be covered under the employer’s policy – speak to your insurance broker if you’re unsure.
What doesn’t public liability insurance cover?
Although public liability insurance covers a number of scenarios, there are some things that your policy won’t cover. For example, injury to employees or damage to employee property won’t be covered under your liability policy. If your actions are deemed to be deliberate or illegal, your public liability insurance also won’t offer cover. If your actions are deemed to be particularly negligent and you’re required to pay punitive damages or an additional fine, you won’t be able to use your liability insurance for these expenses. There are also additional situations that your liability insurance generally won’t cover, such as damage or injury related to asbestos or pollution. Make sure you read the fine print on your policy so you know exactly what your policy will cover.
Is public liability insurance compulsory?
In Australia, there’s no statutory requirement for tradies to have public liability insurance in place. However, it’s generally expected in the industry that you have liability cover in place. Many employers will specify in contracts that you need liability insurance in place and you won’t be able to enter a lot of work sites without it. For some trades, it’s mandatory for you to have public liability in place and in some cases you won’t be able to obtain your licence without it. Although public liability insurance isn’t a legal requirement, a liability claim could mean that you need to pay thousands, or even hundreds of thousands, of dollars following a claim. For this reason, it’s easy to see why you should always have liability cover in place!
How much does public liability insurance cost?
The cost of your public liability insurance will depend on a number of factors, including:
- The size of your business
- The number of employees
- The location of your business
- The type of work you do
- The claims history of the business
Basically, the higher risk you’re deemed to be then the higher your premiums as there’s an increased chance of a claim. It’s important to remember not to underinsured your business – although lower premiums may be attractive in the short term, it can mean that you don’t have the correct level of cover at claim time. Remember to update your insurance broker with any changes to your business, such as new employees, as you may need to adjust your insurance.
How do I find out more information?
If you want to know more about public liability insurance or you’re not sure if you have the right level of cover, simply speak with your insurance broker. They have the industry experience to provide you with expert advice. They can also ensure that you have the right level of cover to suit your specific needs. Your insurance broker will also provide invaluable at claim time – they will liaise directly with your insurer on your behalf to get the best outcome possible.
All Trades Cover are one of Australia’s leading tradesman insurance providers and we specialise in providing high quality insurance cover at a competitive price. With our massive group buying power, we’re able to ensure that the wording of the insurance policies is specifically targeted to the needs of tradies. We also provide free legal advice as part of your insurance cover.