Working in carpentry? Find out what your insurance options are and learn how to get better cover.
Whether they’re working as sole traders or in large construction companies, carpenters face a unique set of challenges and risks. All carpenters need to think about life and business insurance for:
- Work-related accidents, injuries or death
- Loss of income resulting from serious incapacitation
- Legal liability related to carpentry work performed for a client
This article will guide you through the types of insurance suitable for carpenters and the risks to consider.
What risks do carpenters face on the job?
All carpenters are vulnerable to work-related injuries, but those working in the construction industry face particular risks.
According to Safework Australia’s Work-related injuries and fatalities in construction, Australia, 2003 to 2013, tradesmen and technicians made up almost half of all serious workplace injuries from 2003-2013. Of this number, 15% worked as bricklayers, carpenters and joiners. Carpenters had the third highest number of deaths over the report’s ten-year period.
What types of insurance carpenters should consider?
The right type of insurance will be determined by the nature of your work plus factors like age and health. You can sign up for multiple policies and certain types of life insurance can be bundled together or added into one policy as an extra.
- Income protection insurance. If you’re a self-employed carpenter with your own business you should consider income protection insurance.
- Public liability insurance. This protects you against third party claims for damage caused as a result of your carpentry work or one of your staff.
- Total and permanent disability (TPD) insurance. Pays out a single lump sum benefit if you can’t perform your job due to injury. You can select a TPD policy specific to your occupation, bundle it with life insurance or buy it as a standalone policy.
- Trauma insurance. If you’re diagnosed with a specific illness that’s covered under the policy you can receive a lump sum payment to cover medical costs or other expenses.
What categories of carpentry work are eligible for cover?
There’s a variety of carpentry job types including:
- Carpenters working in the construction industry
- Carpenters working as sole traders
- Carpenters running a business with multiple employees
- Apprentice carpenters
- Construction foremen, supervisors and managers
How do insurers classify carpenters?
Insurers typically classify carpenters as blue collar/manual workers or heavy blue collar/manual workers. These classifications indicate a medium to high risk for insurers, meaning you may incur an extra cost on your insurance premiums in the form of premium loading.
How much does insurance cost for carpenters?
Your insurance costs will depend on your personal circumstances including your age, health and the type of carpentry job you perform. Here are some examples of income protection policies for carpenters at various income levels, ranged from cheap to expensive. All these examples are estimates based on a 35-year-old male carpenter living in NSW who doesn't smoke.
*These are example quotes only based on a 35-year-old male carpenter living in NSW who doesn't smoke. Your actual quotes may vary. Quotes are accurate for June 2017.
How can I get the right insurance policy for my situation?
Finding the right insurance requires you to do your research and know your needs:
- Your business needs. Do you have employees? How is your business covered? If you’re an employee, what kind of cover does your employer provide and is it enough?
- Your family circumstances. The type of life insurance policy you buy depends on whether you have a partner and children. While they can be covered, it may not be satisfactory should the worst happen.
- Your financial situation. If you were seriously injured tomorrow, how long would your family survive without your income? Could you pay your medical bills? Your financial situation is a vital consideration in determining how much you pay for insurance.
If you’re looking at income protection insurance one of the biggest things to consider is the value cover.
- Indemnity value cover. This provides you with a benefit payment based on your most recent month’s salary and is a good option for carpenters with a fixed, stable income.
- Agreed value cover. Allows you to lock in a benefit amount based on a salary level agreed upon when signing the policy contract. This is a better option for sole traders and business owners whose income varies widely from month to month.
Insurance options and features to consider
When shopping for an insurance policy there are several common features to consider.
- Benefit period. This is the length of time you’ll receive payments in the event of a successful claim. Most policies have a 2 or 5 year benefit period.
- Waiting period. The time between an accident or injury and the beginning of benefit payments. As a rule, shorter waiting times mean higher premium costs so take your financial situation into account when deciding.
- Stepped or level premiums. Level premiums don’t change, although they are adjusted for inflation. Stepped premiums are lower in the short-term but rise over time. Read our full guide to stepped and level premiums.
- Guaranteed future insurability. This is a life insurance policy option that guarantees your ability to renew or increase your life cover even when your health deteriorates. Get the full run-down on guaranteed future insurability.