Why Do Tradesmen Need Public Liability Insurance?
It’s a fair enough question for a tradesman to ask: Why do I have to take out public liability?
It is the most commonly required form of insurance on the worksite, but many tradesmen are left in the dark as to why they actually need it.
In this article we will take a look at exactly why most tradies are forced to take out cover.
Who Needs It?
Tradies who run their own business or operate as a subcontractor will commonly be required to hold public liability insurance.
In some cases the requirement will be set by the building or construction companies, and in some cases (particularly for licensing) it will be set by the state government.
Worksite Requirements
The workplace requirements are set by the building or construction company that is managing the site.
On most medium to large sites, and sometimes even small sites, the company will require that all subbies provide evidence of their insurance before they are allowed to enter the site?
Licensing Requirements
For some trades which require licensing, such as electricians and plumbers, the various state governments around Australia will have their own public liability requirements.
Without providing evidence of your insurance each year you will not be able to apply for or renew your contractor’s licence.
Why Do We Need It?
As a subcontractor or business owner you will not be covered by the building company or head contractor’s insurance.
This means if something goes wrong and you are found to be responsible, you will be liable for all costs involved in the incident.
These costs could range anywhere from ten dollars to ten million dollars (or more) depending on how serious the incident is.
For this reason the building and construction groups need to ensure that all workers are covered by public liability insurance.
When it comes to the licensing requirements, often this is about protecting consumers and members of the public as much as it is about protecting yourself financially.
Next Step
None of us like having to pay hundreds of dollars for something that we don’t think we need, but public liability really shouldn’t fall into this category.
Even if you have worked as a tradesman for many years without an incident, no matter how careful you are things can (and do) still go wrong.
Public liability is a very inexpensive way of protecting yourself and your business from some pretty serious financial consequences, and the fact that it is mandatory for many tradies is not a bad thing.
If you would like a quote on this or any other form of tradesman insurance please contact us.
