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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.
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.
Public Liability Insurance for Demolition Contractors is required as part of your licensing requirements.
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.
Why do you need Public Liability Insurance for Demolition Contractors?
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.
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.
How to get a quote for demolition liability insurance?
How to get a quote for demolition liability insurance?
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Daniel Ufer
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.
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.
Truck and Plant Insurance for Demolition Contractors
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:
Some of the additional questions that you may also get asked when covering your trucks and machinery could be the following:
- How much demolition work is done within the CBD?
- What is the maximum height of buildings being demolished?
- Are you doing any asbestos removal? (Asbestos removal insurance is also something we can help with however, for more information please read through our articles that have specifically been written for the asbestos industry.)
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.
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Daniel Ufer
It's just truck insurance, why does an insurer need all of this information?
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.
Recap
As outlined above, the key takeaways from this article is:
- Ensure that all of your business activities are declared
- Trust a broker who give you advice around your occupation
- Combine policies with one broker to ensure that you get competitive rates and no gaps in cover present themselves
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.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Daniel Ufer, Priority Insurance Brokers, ABN 95 655 563 616, AFSL 233750
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