Subcontractor Insurance
Many tradesmen around Australia operate as subbies, and will therefore need subcontractors insurance.
The most popular forms of insurance when becoming a subcontractor are public liability and income protection, along with a few other forms of cover such as tool insurance.
There is sometimes a misconception that a subcontractor doesn’t need their own business insurance, as they will be covered by the builder’s insurance. This is incorrect in the vast majority of cases.
In this guide we will run through the most popular policies for subbies and the information that you need to know.
Public Liability
Without a doubt public liability is the most common form of insurance for subcontractors, and for all tradesmen for that matter.
Public liability will cover a subbie for property damage or personal injury that they cause to others through their business activities.
The cost is relatively low for a subcontractor undertaking standard trade activities, but the potential protection is huge.
Why do subcontractors need public liability?
As a subcontractor you will generally not be covered by the main contractor’s insurance, and therefore you’ll need your own cover.
Claims on tradies for property damage and personal injury can be anywhere from a few thousand dollars to potentially millions, so it’s certainly worth the relatively small cost.
For more information please visit our dedicated public liability insurance page.
Income Protection
Income protection can replace your income for period of time if you cannot work for a period of time due to illness or injury.
Although not as popular as public liability, income protection is still a common requirement for subbies on major work sites.
Why do subcontractors need income protection?
Tradesmen working on wages will generally have the benefit of sick leave and worker’s compensation, but as a subcontractor you will not have access to either.
If you can’t work for a period of time you may find yourself quickly being unable to pay the rent or mortgage, or put food on the table. Income protection can save you from this problem.
More information on this cover can be found on our income protection for tradies page.
Tool Insurance
As a subcontractor you will generally be providing your own tools for the job, which means carrying around plenty of gear in your ute or van.
The builder or whoever else you’re subcontracting to is not responsibly for your gear, so if it gets stolen or damaged, the cost is all on you.
Tool insurance can cover your equipment against a number of risks such as damage by fire or vehicle collision, as well as theft which is generally the biggest risk.
With regards to theft, the vast majority of policies will only cover the tools if they are securely stored and forced entry has been used to access then.
Considering the risk of having your tools stolen, the cost of tool insurance for subcontractors is very reasonable.
Why do subcontractors need tool insurance?
As mentioned above, subbies are responsible for their own gear, so you need to ensure it is properly insured.
Tool theft is rampant across Australia, and no matter how you secure your gear, a determined thief will do whatever is required to access your tools.
As a subcontractor, without your tools you won’t be able to work, and if you can’t work you’re not going to get paid.
You might be able pay for replacement gear out of your own pocket, but wouldn’t it be better to have an insurance company pay out those thousands of dollars for new tools?
Quotes and Information
If you are unsure on what types of insurance you need as a subcontractor, the first step should be to speak with the company hiring your services to see if they have any specific requirements.
For example some builders not only require that you have public liability, but also that you have a specific amount such as $10 million or $20 million etc.
Once you know what the company’s subcontractor insurance requirements are, the next step is to speak with an insurance broker. Preferably you should deal with a broker who specialises in insurance for tradies.
Here at Tradesman Insurance we can assist with quotes on public liability, income protection and other forms of cover for subcontractors.
To obtain a quote please complete our online quote request. Alternatively you can visit our contact page if you’d simply like to have a chat with us.
