Tradie Insurance Guide

Whatever trade you are in, you probably have a unique set of skills, jobs and risks. In other words, your insurance needs are unique to your situation. The great news is you can easily customise a policy to meet your specific work requirements and protect yourself from setbacks.

Either the government, your contractor or your clients will probably require you to have public liability insurance to protect you if you injure someone or damage something.

There are also other types of cover that can help you protect the business of "you": from tool insurance to protect your trusty tools if they break or get stolen, to personal accident insurance that provides income if an accident keeps you from working, to commercial vehicle insurance that covers any work accessories and the property inside.

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If you are ready to speak with a consultant about different business insurance options available, simply enter your details in the form. Keep reading if you want to learn more about the different types of cover available.

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This is by no means an exhaustive list, so speak to different insurers to find out exactly who they offer cover for.

Do tradies need insurance?

Where most employees are covered against injury and workplace accidents through their employer, tradies need to take care of themselves to make sure a bad day at work doesn't sink their entire business. Tradies are often required to work on private or public property, and having tradesman insurance will cover you for costly accidental property damage and public liability. If you work with tools, you'll want to protect them from theft and everyone else from injury.

On top of looking for cover for your work, you will also have to consider everything you need to get the job done. If you were to get into a car accident in your work vehicle, most car insurance policies exclude work-related accidents, so you'd need specific cover offered with tradesman insurance.

Types of insurance applicable to tradies

Due to the variables between trades, there are a variety of options and extras with any tradesman policy, making it easier for tradies to get the cover they need based on what their work entails. Here are the typical inclusions for tradesman insurance.

• Some additional types tradies should consider

  • Multiple risks – Multiple risks cover extends to damage or loss of items anywhere in New Zealand or Australia, saving you time from seeking cover if you operate in both countries. Multiple risk cover is considered standard for utility and municipal contractors, highway, industrial and heavy contractors and general builders.
  • General property insurance – This covers any item you take with you anywhere in the world that is lost or damaged due to violence, theft or burglary, including goods in transport. This policy usually covers against incidents of:
    • Jackknifing or fire
    • Forced landing or misadventure of aircraft
    • Impact from some source other than the conveying vehicle
    • Washing overboard or jettison
    • Violent or forcible entry of an unattended transporting vehicle and war-related activities
    • Damage or loss during unloading or loading
    • Labour disturbances
    • Poor packaging
    • Damage while on display
    • Interrupted transport because of carrier's financial problems
    • Damage to glass, perspex or plastic signs
  • Tax audit – If a tax audit, investigation or review of a business's tax affairs are authorised by an agency or authorised body, necessary professional fees are covered. An extra benefit included is automatic reinstatement of the insured sum. There is optional insurance to cover personal income tax audits if the insured works in the business full-time.

What types of cover suit me?

In the end, the level of cover you need will depend on what risks are involved with your work. Here is a simple breakdown for the level of cover you need, depending on the nature of your work.

_{Note: This is only a rough guide. You should consider your options with a broker.}

Why should trades workers consider Public Liability Insurance?

The greatest benefit of Public Liability Insurance is to help avoid financial losses and prevent becoming insolvent. As an example, consider accidental spills that spoil property in some fashion. It is the responsibility of the business owner to replace damaged goods. That kind of claim is fairly minor. Liability insurance would cover the cost or repair and the cost of replacing the substance that was spilled.

A more serious circumstance would occur if work done by the tradesman, turns out to be faulty. The product is destroyed and someone is injured. The tradesman is responsible, in this case, for the faulty product and the injury that occurred.

Without the benefit of Public Liability Insurance, the tradie could incur millions of dollars of out of pocket expenses. Legal fees and compensation are expected. The circumstances could become worse if legal action is taken against the tradesworker. They could become insolvent and unable to afford support for themselves. The design or Public Liability Insurance limits this kind of risk. Even if major financial demands are made, a tradie can continue to run their business.

Financial protection in the event a tradesman or his company causes losses or damages to some third party is provided by Public Liability Insurance. The cause can be due to negligence or be accidental. Some trades like plumbers and electricians are required to carry Public Liability Insurance.

Do I need to consider tool insurance?

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Home warranty insurance for tradesworkers

The state has regulated that contractors, renovators and builders who complete construction of residential projects must carry Home Warranty Insurance if the project exceeds a specific dollar amount.

Work cannot begin on these projects until Home Warranty Insures is in place. Each state in Australia has its own threshold that makes Home Warranty Insurance compulsory. NSW has a $20,000 threshold. In most other states, the threshold is $12,000. The only state, where Home Warranty Insurance is optional, is Tasmania.

The insurance protects the client financially in the event defective work is produced or if circumstances that prevent work from being completed arise. Future homeowners of the property are also protected for a mandated period of about six to seven years. There are positive aspects for tradie's and builders also. Builders establish themselves as professional, trustworthy, law-abiding tradesmen.

Business is gained. Most people refuse to hire someone who does not carry Home Warranty Insurance. Harsh government penalties are avoided. These fines can cost thousands of dollars.

Tradespeople will want to use an insurance provider who understands the requirements of Home Warranty Insurance. Providers should be experienced and know the requirement of Home Warranty insurance in each state. The legislation is meant to protect consumers. The insurance is compulsory. The wrong cover can attract large fines.

Owner-builder cover

Owners building homes for themselves are required to buy Home Warranty Insurance only if the home will be sold within a certain time frame after construction or renovation is complete. Most sellers do not become aware of the statute until notified by a conveyance company or their lawyers. Time periods differ from state to state. WA has a seven year time period. Victoria and NSW have a time period of six years.

How to compare trade insurance policies

• Assess the risks you face. A vital step to take before you even start comparing policies is to assess the risks you face when conducting your regular work. What is the likelihood of something going wrong and resulting in you making a claim? What would the financial consequences be if you did not have any cover in place? Taking the time to answer these questions can help you work out exactly how much cover you need to take out.
• Research policies on offer. Finder.com.au offers a stack of online resources to help you compare tradesman insurance policies. Consider the level of protection offered by each policy. Are your tools covered in any location, or only if they are locked away securely? Will one policy pay out much more for a public liability claim than another? The level of cover differs from one policy to the next, so it pays to do your research and shop around.
• Compare quotes. Track down quotes from a number of insurers to compare the prices on offer. Of course, you also need to look at features other than the price in order to determine exactly what you will be getting for your money. Read product disclosure statements closely to examine benefits, features, limits and exclusions.
• Speak with a broker. If you need help finding the right type and level of cover, an insurance broker can offer insurance advice that is specifically tailored to the needs of you and your business.

Trade Insurance FAQs

• How can I save money when shopping for insurance cover?

  Due to the wide range of risks tradies are exposed to, there's quite a wide variety of insurance cover you need to consider. It's often possible to group some of these forms of cover together under a single policy, so speak to your insurance provider to find out how you can do this and enjoy a reduction in premiums.

• Which forms of insurance are most common for tradespeople?

  Generally speaking, public liability, income protection and tool cover are the most commonly held forms of insurance. However, depending on the size and nature of your operation and the work you do, the type and level of cover you need can vary greatly.

• Will my public liability insurance offer cover for sub-contractors?

  No. It's vital to check that your sub-contractors have their own public liability cover in place before you allow them to start work on a building site.

• I'm strapped for cash and struggling to pay my premiums. What can I do?

  Some insurers will allow you to pay your premiums by the month to help with your cashflow. It's also a good idea to seek expert advice from a broker to see if there is any way to reduce your premiums.

• Tradie insurance is confusing. Where can I find help?

  Finder.com.au offers a wealth of information to help you compare a range of policies. It's also a good idea to seek expert advice from an insurance broker who can assess the insurance needs of your business and find a policy to match.

If you are interested taking out cover to protect your occupation as a tradesman, it is worth speaking with an insurance consultant about the different cover options available.

With so many different types of cover falling under the category of tradesman insurance, tailoring your cover and finding the right options by yourself can be complicated.

An insurance consultant will help you compare the different options available and provide you with a preliminary quote based on your details. Once that is complete, they will assist you through the entire application process.

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