Trade Insurance Australia

Here in Australia there is a requirement for many trade workers to hold various types of insurance.

The types of insurance required by tradesmen include public liability and income protection insurance, and the specific covers required will depend on your trade and your business structure.

In this guide we will look at the different types of tradesman insurance required for the various employment and business structures used by tradies.

Apprentice

Virtually all apprentice tradies will be on wages, which generally means that there will be no specific insurance requirements.

Although no insurance may be required by law for apprentice tradies, there are still a number of covers which can be helpful.

As an apprentice you will be starting to build up your own collection of tools, and to protect this investment it is worthwhile having tool insurance in place. Tool insurance is generally quite inexpensive given the coverage that it offers, and it is definitely cheaper than having to replace your tools.

Income protection is more of a luxury for apprentices, and being on wages you will generally have sick pay available. If you can afford some level of income protection insurance it can certainly be a good idea.

For apprentice tradies with a family to support or a mortgage to pay, income protection will become more important, along with other covers including life insurance, trauma and TPD insurance.

Tradesman on Wages

Once you have made the jump from apprentice to fully qualified tradesman, insurance will start to become more important.

As a tradesman on wages you still won’t have any mandatory insurance requirements, but that doesn’t mean you don’t need any cover.

Your tool collection will no doubt have grown since your days as an apprentice, so this is a good time to review your tool insurance requirements and increase your cover if required.

If you have taken on a mortgage or started a family since becoming a qualified tradesman, it will also be time to consider income protection, life insurance, trauma and TPD insurance to protect your loved ones.

Subcontractor

One of the biggest changes to your trade insurance requirements will come when you switch from being on wages to being a subcontractor.

As a subbie you will now have a lot more responsibility for your own work, and as a result of that you will need to take out a public liability insurance policy.

Public liability insurance is not always mandatory, but it is certainly a good idea. If working on larger projects or worksites you will most likely be required to have public liability, and it is also mandatory in some states for certain trades.

As a subbie you will no longer be entitled to any sick pay, so you need to consider how you will survive if you cannot work for a period of time due to sickness or injury.

Income protection insurance can assist in this case, and as with public liability it is mandatory on many larger worksites and with some contracting companies.

Another form of cover worth considering is business expense insurance. Although this cover is not mandatory, it will help to cover your business expenses if you cannot work for a period of time due to illness or injury.

As with any other tradie, you should also consider covers such as life, TPD and trauma insurance, especially if you have a family to support. Tool insurance will also be as important as ever.

Company Owner

During their career some successful tradies will make the jump from being a subcontractor to being a fully fledged builder or business owner in their own right.

This brings with it another range of insurance requirements that can include contract works insurance, key person insurance, business interruption, workers compensation and more.

Tradespeople falling into this category should ideally work closely with their insurance broker to tailor a specific package to meet their requirements.

The Importance of Trade Insurance

Having the right trade insurance in place is vital for all Australian tradesmen. You can work hard all year long, but one mistake can wipe out everything if you are not properly insured.

A comprehensive trade insurance package may not exactly be cheap, but it is definitely affordable, especially with monthly payments available through most insurers.

For more information on tradesman insurance please contact your preferred broker or submit an enquiry through our website to be put in contact with a suitable professional.