Case Study – Carpenter

This is the first in a series of case studies we will be putting together, focusing on how insurance can assist various tradespeople around Australia.

Today we will be looking at a carpenter from Brisbane named Terry.

About Terry

Terry finished his carpentry apprenticeship a couple of years ago and stayed on with the same builder for two years as an employee.

Recently he switched to being a subcontractor and needed to get his insurance sorted out, so he took the advice of another chippie he works with and visited the Tradesman Insurance website.

Terry’s Risks

The first thing that we did for Terry was to assess his risks. All tradesmen face a range of risks, but in becoming a subcontractor Terry will now be exposed to even more risks and liabilities.

Thankfully many of the risks faced by Terry can be protected against with various forms of carpenters insurance, and below we have detailed those risks along with the solutions.

Being Unable to Work

Now that Terry is switching to being a subcontractor he will no longer be eligible for worker’s compensation coverage or even sick leave.

This means that if he cannot work he won’t get paid, which in turn means that he won’t be able to pay his mortgage or feed his young family.

Solved With Income Protection

This risk is easily covered with income protection insurance, which will replace up to 75% of Terry’s income in the event that he cannot work due to illness or injury.

There was a slight hiccup when Terry told us that he regularly rides a trail bike for recreational purposes, however we were able to find an insurer who would give him full cover for this risk also.

You can read more about income protection for tradies here.

Having His Tools Stolen

A big risk for all tradies is having their tools stolen. Terry already had a tool insurance policy in place, however when we reviewed the cover we found that it did not cover theft!

As with most carpenters Terry had built up a pretty comprehensive collection of tools, and if he had to replace the lot it would have cost him close to $15,000.

Solved With Tool Insurance

After reviewing his existing insurance and finding that it did not cover theft we switched it to a new policy which covered theft from a secure location, which was fine for Terry since his tools where always locked in his secure trailer.

Along with covering theft, the new tool insurance policy also covers fire and storm damage, along with damage caused in a vehicle collision or rollover.

More information about tool insurance can be found here.

Causing Injury to Another Person

As an employee Terry was covered by his employer’s insurance, but now he is financially responsible for his own actions, which includes any negligent act which results in injury to another person.

Given that such claims can climb into six-figure territory for serious injuries and death, this was simply not a risk that Terry was prepared to take on.

Solved With Public Liability

Terry could see the benefits of protecting against this risk, and regardless of that, public liability was a mandatory requirement set by his builder employer anyway.

Public liability insurance will protect Terry financially by covering the cost of a claim that involves injury or death to another person as a result of Terry’s negligence.

We have some great information on public liability for tradesmen here.

Causing Property Damage

Along with causing injury to others, another major risk for a subcontractor is causing damage to another person’s property through negligence or poor workmanship.

Like all carpenters Terry takes plenty of pride in his work and never expects anything bad to happen, but given the potential for six-figure claims it was another risk he was not prepared take on.

Also Solved With Public Liability

Thankfully the public liability policy we spoke about earlier will also cover Terry for the property damage risk. Indeed all public liability policies will cover against both personal injury and property damage.

Outcomes

The outcome for Terry was that he could go to work each day safe in the knowledge that if he stuffed something up he would be covered financially, and if he injured himself or fell ill his income would also be protected.

He could also return home each night knowing that if his tools were stolen during the night, he could simply call his insurance broker the next day to lodge a claim for the full replacement value of the tools.

The insurance package put together for Terry was not exactly cheap, but it only represents a small percentage of his overall income and he is able to spread the cover over the year with monthly payments.

What’s more, Terry spoke with his accountant and confirmed that the premiums for each of the policies detailed above would be fully tax deductible for him!

We also discussed the benefits of life, TPD and trauma insurance with Terry, however he has decided to put these off for another year.

For more information about how we could help you with your tradesman insurance needs please contact our office or complete our online quote request form.

This is a fictional case study, but is made up of real life examples from Australian tradesmen.