What insurance do tradesmen need?
29th Aug '17 • By Jayde Ferguson
If you’re looking for a tradie to get the job done, or you’re a tradesman yourself, having the right insurance is crucial. Construction and building work of any kind can come with a lot of risks – ones that all tradesmen will eventually face. And without adequate protection, the person hiring the tradie for the job and the tradies and business themselves can be liable.
When you hire the services of a tradie for a home renovation or build, there are mutual responsibilities in the contract to be aware of. It’s the responsibility of the tradie to have all current licenses and insurance, and it’s our responsibility to know they’re protected. If a tradie you hire isn’t insured or their insurance has lapsed, the consequences should something go wrong fall on us. And boy, can they be pricey!
If you’re a tradie running your own business or working under someone else, trades insurance will keep you protected and the work you do legit. The types of insurance to obtain fall into two categories – general insurance and life insurance. Here’s what you need to know:
General Insurance
General insurance covers public liability and tools insurance. These are the two all tradies will need to perform protected work throughout Australia. Depending on the level of cover you’re after, both insurance types can match the right policy for your needs and budget. You should check your policies for all insurance policies at least once a year to determine whether or not you’re paying for exactly what you need.
Public and Products Liability Insurance
Many of us don’t take the time to understand the importance of things like public liability insurance. It doesn’t matter how careful you are, accidents can happen on the job. And without the right protection, it can cost thousands of dollars to fork out money for legal fees or to pay for the damage or repair.
If you’re hiring a tradie to do the job, you’ll need to check whether they’re covered under the public and products liability insurance. For tradies, this level of cover is the bare minimum of essentials to perform work. All tradesmen require public and products liability to protect their business and personal assets. It will cover:
- Damage caused to someone’s property during work undertaken.
- Covers costs associated with any damage or court action taken against you.
- Protects against injury while working on job site.
- Protects against injury should someone else get injured as a result of work carried out on your behalf. Whether they’re one of your crew or someone unconnected to the job, they have a right to receive compensation.
Tools Insurance
For tradies, tools are the most prized possessions. It’s what helps to drive business and get the job done properly – so it pays to keep them protected. Tools insurance comes in a variety of policies. Because of the complexity of some of them, it’s vital to check (and double check) what one will work best for you. For example, some policies will only cover theft if the tools are properly secured whereas others will only cover for accidental damage.
Whilst tools insurance isn’t essential for tradies, it’s definitely worth having – especially if you run or own business or you’re a one-man-band. Hand tools and power tools are covered under these policies whether they have been lost, damaged or stolen. To take out this insurance, first ensure you have the correct security measures in place to keep your tools safe.
Anyone associated with the building trade industry can take out tools insurance. This includes apprentices, handyman services, garden maintenance contractors, mechanics, floors sanders and anyone else who uses tools to make a living. If this sound like you, tool insurance is a must. Make sure you ask these essential questions to find the best policy for you:
- Are they covered if they get stolen on a work site?
- Is there a limit to any one item?
- How much will the insurance cover?
- What excess applies to a claim?
- How long does it take to be paid on a claim?
- Are they insured if damaged in an accident?
- If I make a claim, do I get new tools or just the value of the old ones?
Other Tradesman Insurances to Invest in
To give the ultimate peace of mind, other insurances to invest in include:
- Business Expense Insurance: If you’re a tradie that runs your own business, business expense insurance should be strongly considered. It’s not essential – but it will protect business expenses if you’re unable to work due to injury or illness.
- Income Protection: Offers you a monthly income if you’re unable to work due to illness or injury.
- Vehicle insurance: Covers work vehicle against damage or theft.
- Plant and Machinery Insurance: Similar to tools insurance, this covers any machinery that’s hired or owned for the job including differs and forklifts. Always check the policy documents for specific information relating to whether the machinery has been lost, damaged or stolen.
- Contract Works Insurance: This type of insurance covers construction that’s already underway on a building site if it’s been damaged by natural events like a flood or fire. It can also protect against vandalism and pays to repair or redo the work that’s been damaged from the cost of the labour to the materials and tools required.
Especially when it comes to building a new home, undertaking renovations or other work in the trade industry – you can never be too careful or too sure. Invest in the right protection today!
This article is written by Jayde Ferguson, who writes for Phoenix Insurance Brokers – A leading provider of insurance including worker’s compensation for businesses, and risk management services. You can catch her on Google+.
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