Getting demolition insurance can be difficult across all forms of insurance such as public liability, truck insurance, and plant or equipment insurance.  This is mainly due to the complex exposures that the demolition industry presents.

We have compiled a guide to help you better understand your insurance needs as a demolition contractor based off our experience from issuing policies to businesses across all states of Australia.

In most industries, business owners have a choice as to whether they have public liability insurance or not however, for the demolition industry it is usually a requirement of your demolition license that you supply a copy of your insurance policy prior to issue. This can also be on renewal of your license as well.

Worksafe QLD, SafeWork NSW and the Victorian Building Authority have enforced the requirement that a certificate of currency must be issued for at least $5,000,000 of cover which also notes your activites as "demolition" or something as close to. To obtain a certificate of currency from your insurer the policy must be in effect and paid for (even if it is by monthly instalments).  They will also usually require you to have workers compensation insurance if you have employees. 

It's a question that we get asked constantly across every industry and in reality, a demolition contractor follows the same process as every other business - there is risk associated with the work that you do. The best way that we can generally answer this question is by explaining what public liability insurance actually covers - it covers personal injury and property damage to a third party that you are liable for. 

Now you might be thinking, property damage? I am demolishing the building of course its going to get damaged. This extends further than just the job site you are working on. For example, if you are operating unregistered plant and equipment and cause injury this could lead to claims that may fall under your public liability insurance. Along with damage caused to neighbouring properties.

The other component is the personal injury factor which every business is exposed to however, trade industries tend to hold a higher risk in this area than other occuptions.

When looking for public liability insurance for your demolition business it is strongly recommended that you speak with a broker who understands the demolition industry. Although all insurance brokers can place cover for demolition businesses it is important that you are getting your advice from someone who understands how a demo company operates. Demolition insurance policies have a number of exclusions and limitations that should be considered prior to placing the policy. If these are overlooked or missed it could lead to a claim not being paid.

Priority Insurance Brokers look after a large amount of demolition contractors right across Australia. There isn't much we haven't seen from the demolition industry. From soft strip out crews, multi-storey demolition projects to explosive demolition contractors. Most of our quotes are provided on the same day or the next. 

How much liability insurance do I need?
When you are considering the purchase of public liability insurance for your demolition business it is important to consider how much cover you should get. This shouldn't just be based on price. As a family owned company ourselves, we understand that costs should be considered however, it's more important to consider your overall exposure based off the projects that you are involved in. Most people think that $10,000,000 is an impossible amount of money however, when you consider the potential impact that a large loss could make including all other costs associated with the claim the costs will add up very quickly. 

The other component to consider is that you may also have contractual obligations that you need to adhere to. For example, some major contractors, councils and other Government bodies require $20,000,000 worth of cover in most instances. Generally speaking, the minimum amount required to obtain your demolition license is $5,000,000 or $10,000,000 depending on the state of issue.

Your plant, equipment and trucks also require you to list your occupation down on the policy. This shows the insurer how the machinery or trucks are intended to be used so that they can rate their premium and their risk accordingly. For example a plumber using their excavator to dig a trench as opposed to a demolition contract using an excavator to rip down a building will be charged very different rates. They can also enforce different excess conditions as well.

Some of the additional questions that you may also get asked when covering your trucks and machinery could be the following:

Depending on your answers to these questions will sometimes depend whether an insurer will actually offer you cover or not. For example, some insurers have a blanket exclusion for asbestos and will decline to offer cover for vehicles carrying asbestos material, even if you have a separate asbestos liability policy. 

Trucks still hold their own level of liability cover. This follows the same principles as your public liability insurance where if personal injury or property damage occurs, this can be claimed under the associated trucks insurance policy. Construction sites especially can be a high risk for insurers due to recent large losses occuring.

What your truck is carrying can also be a red flag for insurers as this can also fall under the same claim. Things like removal of debris or clean up costs and recovery costs are generally included under a truck insurance policy. 

As outlined above, the key takeaways from this article is:

All information provided in this article is general in nature and your personal circumstances have not been considered. As such, this article cannot be interpreted as personal advice and should you wish to be provided with personal advice about your personal circumstances then we recommend that you get in contact with us to discuss your situation further.