Insurance For Tradies

When you’re a tradesperson, having suitable cover should the unexpected happen could be good idea. No matter how skilled or experienced you may be, unforeseeable situations can still arise. Tradie insurance, can provide both financial cover and peace of mind if you find yourself facing a claimable event.

Prior to making a decision on a level of cover, ensure you review the Product Disclosure Statement for details of policy inclusions, limitations and exclusions.

What does tradie insurance typically cover?

Regardless of whether you’re a plumber, gardener, bricklayer, carpenter or undertake some other trade, tradies insurance provides a safety net for your business. The precise type of insurance coverages you’re likely to need will in large part depend on your industry and the specific tools and processes you use.

There are lots of different types of insurance products that you might consider, and many providers offer flexible options so you can choose the inclusions relevant to your trade.

Some business insurance products which may be considered by tradespeople include:

• Public liability insurance: This can cover legal fees and compensation costs if a customer, member of the public, or a supplier sues you for injury or damage to their property as a result of your alleged negligent business activity*
• Tax audit insurance: If your accounts are audited by the Australian Tax Office, you may need to hire external accountants to assist in the process. Tax Audit Insurance can cover a business for specified costs in responding to an official tax audit*
• General property (tool insurance): Trade tools can be expensive, so if yours are lost, damaged, or stolen, this insurance is there to make sure you’re covered for their replacement up to policy limits*
• Portable equipment: This can provide cover for your tools and other equipment used for business purposes only which travel with you*
• Personal accident & illness insurance: Accidents can happen on even the most professional and organised working conditions. Should the unexpected happen, this product can cover your income or a portion of your income* if you’re unable to work due to illness or injury

Is business insurance compulsory for tradies in Australia?

As a self-employed tradie, having appropriate insurance is your responsibility. In your everyday role, you may be required to work on public and private property, and if you were to cause any accidental damage to a person or their property, you could be liable to pay a large amount in compensation.

Without adequate cover, this could severely harm your business, as well as your own personal finances, depending on the type of incident and your own personal circumstances.

Some types of insurance are mandatory for businesses across Australia¹, while others are optional. The compulsory types can include:

• Worker’s compensation: needed if you employ anyone
• Compulsory third party personal injury insurance (CTP): necessary in some states if your business owns a motor vehicle

If you’re in the construction industry, most Australian states will not allow you to obtain a licence until you’ve taken out suitable insurance cover. Required insurance types often include²:

• Domestic building insurance
• Professional indemnity insurance
• Public liability insurance
• Builder’s indemnity insurance

How much will you need to pay for tradies insurance?

The cost of insurance for tradespeople varies depending on a range of factors. Factors which can impact the amount you’ll have to pay can include the following questions:

How much of a risk does your trade pose?

Businesses that operate in higher-risk environments may need to pay more to ensure they’re adequately covered.

How large is your business?

Generally, the more employees you have, the more chance there is of an accident happening. Larger businesses may have to pay more to ensure each member of staff is properly covered. You may also find your premium is affected by your business’ turnover rate and the number of years it’s been in operation.

What equipment do you use?

If you use more expensive tools and equipment, such as cranes and heavy machinery, this will probably cause your premium to increase.

Where do you operate?

Do you work in a high-risk area, such as somewhere that’s prone to storm or high winds? If so, your insurance provider may take this into account and charge a higher rate.

What’s the risk of not having suitable cover as a tradesperson?

It’s common for members of the public to request information about a tradesperson’s insurance before they hire them for a project. That’s because without it, there is an increased risk to the customer.

If there were to be any damage to property or injury to your customer as a result of your work, your customer may struggle to get the compensation they’re owed if you don’t have sufficient insurance. These situations can put serious financial strain to your business, particularly if the customer sues you.

What kinds of trades may require some level of business insurance?

As examples, if you work in one of the trade fields listed below, then having business insurance may be suitable for you.

• Bricklayers
• Carpenters
• Handymen
• Electricians
• Plumbers
• Concreters
• Landscapers & gardeners
• Painters
• Tilers
• Builder
• Plasterer
• Welder
• Arborist

Compare tradie insurance with iSelect and BizCover

If you’re looking to find cover as a tradesperson, iSelect in partnership with BizCover can help you compare plans.. Get started comparing business insurance products online today, or call 13 19 20.

*Please note that all insurance is subject to the terms and conditions set out in the policy wording or Product Disclosure Statement. The information set out above is general only and should not be relied upon as advice.

Sources:
1. https://www.business.gov.au/Risk-management/Insurance/
2. https://www.business.gov.au/Planning/Industry-information/Building-and-construction-industry/