Do Tradesmen Need Insurance?
One of the most common questions asked of an insurance broker by tradesmen is whether or not they need insurance.
The answer depends on what is meant by ‘need’. Some tradies absolutely need insurance to get their contractors licence or to enter certain worksites.
Other tradies may not need to have insurance by law, but if they want to protect themselves and their family, then the definitely need some form of insurance.
In this short guide we will take a look at which tradesmen need insurance, and which can simply benefit from it.
Worksite Requirements
Many worksites operated by larger building and construction companies will require that all self-employed tradesmen and subcontractors have their own insurance in place.
The reason for this is that a builder’s own public liability and other forms of insurance will only cover their own staff, and not subcontractors or other self-employed tradesmen.
The most commonly required form of cover on worksites is public liability insurance. This will cover you form damage or injury that is caused to other people or their property.
Another common form of insurance required on some worksites is income protection for tradies. This is because subcontractors and self-employed tradies are generally not covered by worker’s compensation or sick leave.
Licensing Requirements
Certain tradesmen will require a contractors licence depending on the state or states that they operate in.
There are various state licensing requirements, with some of the common ones including plumbers in Victoria and electricians in Queensland and Tasmania.
In each of these cases a tradesman must hold public liability insurance of at least $5 million in order to hold a licence. Without insurance you will not be able to apply for or renew a licence.
Some tradesmen will have additional insurance requirements for their licence. One example of this is Queensland electrical contractors who must also hold $50,000 in consumer protection insurance.
Personal & Family Protection
Worksite and licensing requirements are the only examples of mandatory insurance for tradesmen, however there are plenty of other cases where a tradesmen could be considered to need insurance.
If you work for someone else on wages, you will be protected in various ways through worker’s compensation, sick leave and your employer’s own public liability insurance. But if you work as a subcontractor or are self-employed you will be on your own.
In order to protect yourself and your family you need to hold various forms of insurance.
The most common forms of insurance for tradesmen include public liability and income protection. Tool insurance is another popular options, as well as life insurance for those with families who depend on them.
More Information
If you are unsure about whether or not you need insurance the best option is to speak with a qualified insurance broker or adviser, preferably ones who specialises in tradesman insurance.
A qualified broker will be able to assess your situation and make recommendations on which types of insurance you may or may not need. They will also be able to obtain quotes and help you with any paperwork.
If you’d like to get quotes on your cover or speak with a tradesman insurance specialist, please complete our online quote request or get in contact with us.
