Whether you are a handyman or a plumber, as a tradie you take pride in your skills and tools. After all, your trade relies on these two things.
But that does not mean you will not encounter problems on the job. What will you do if you damage your client’s property or injure a member of the public while working?
An aggrieved person may ask for you to pay their costs or sue you. That is why you need public liability insurance.
Public liability insurance for Tradies may cover the cost of injury or property damage to a third party caused by your business activities.
Understanding the Importance of Public Liability for a Tradie
Public liability insurance can financially protect you and your business from having to pay third party damages caused by your trade business activities.
Although public liability insurance is generally not mandated by the government in Australia, liability cover is essential for high-risk trade jobs. You never know when things could go wrong in a way that could impact you and your business in a major way financially.
For example, a plumber’s work may result in severe water damage. Someone can trip over the wires laid down by an electrician. A handyman can accidentally knock an expensive vase while working. A tiler’s customer can slip on a damp floor. Consequently, you can be responsible for a big payout.
This might be the cost of repair or replacement in the case of property damage. For personal injury, it can be anything from medical bills through to lost income and other compensation.
Keep in mind that third party liability claims can damage your finances, and a serious claim could put you out of business.
With public liability insurance in place, you have peace of mind that a claim may be covered without having to dig deep into your own pocket.
HOW TO OBTAIN PUBLIC LIABILITY INSURANCE
Public liability insurance is designed to protect your business from expensive claims and lawsuits arising from injuries and property damage caused by your business to a third party. All trade businesses should have this cover in place.
There are many factors that should be considered when choosing PL cover. This is because not all covers are equal.
Understanding the Cost of Public Liability Cover for Tradesman
The price of the cover varies based on several factors.
- Size of Your Business:
Staff size. A carpenter with 2-3 employees will generally pay more for public liability insurance than a sole trader carpenter with similar business activities and claims history.
- Risk Factor:
Trade business activities vary from trade to trade and the risk factors involved can be different. In other words, some trades have more or greater risks than others. For example, generally a gardener will pose less risk to an insurer than an electrician.
Check the policy has coverage for all your business activities. For example, if you are a painter that does a bit of scaffolding, make sure that the policy lists scaffolding as one of your business activities, or you will not be covered for it.
Out of Pocket Costs
If your claim is accepted, you will be asked to pay an amount out of your pocket known as the excess, while the insurer will cover the rest. Review the excess that you will need to pay.
Choose a Good Insurance Broker
Choose your insurance broker carefully as they help organise suitable and affordable terms and assist with claims. Here are some tips to choose a good insurance broker.
- Ask your peers which insurance broker they recommend and why. You can also check online reviews and testimonials on Google.
- Consider if the insurance broker has experience in placing cover for your trade
- Consider the quality of the advice they have provided you with
- Insurance brokers in Australia are required to be licensed by the Australian Securities and Investment Commission (ASIC).
Get Multiple Quotes for Tradies Public Liability Insurance
Compare cover and prices to save on costs and optimise cover. That does not mean you should settle for the cheapest policy that may not cover your needs. Choose insurance cover that meets all your requirements at an affordable rate. A good insurance broker can help you compare cover and costs.
*Important: Cover may be available subject to meeting insurers underwriting criteria. Some of the covers listed may or may not be available or may have limitations or exclusions. Cover inclusions vary significantly from insurer to insurer. DO NOT rely upon the above. Check your policy schedule carefully for inclusions and exclusions and limitations. Talk to a business insurance broker for more information.
Romit Malhotra is the brand representative of Smart Business Insurance, a leading Australian insurance broker. A big foodie, he loves to travel the world. Also, a diligent businessman, Romit likes to pen down his thoughts on related topics whenever he finds some free time.