Building and Construction Insurance – What you need to know
Whether you are a sole trader or a small business owner, insurance is a major part of doing business. Without the right type of cover, you are leaving yourself wide open to a range of risks that can be financially devastating.
At Insurance Advisernet, we deal with many tradies and the one common factor we have noticed is that most of them are underinsured. This over exposure to risks that are prevalent in the building and construction industry can leave you struggling to operate your business, even closing it down due an inability to recover from financial losses. The simple solution is to speak with one of our insurance advisers who can ensure that you have the right policies for your line of work.
Let’s take a look at the type of insurance policies needed by tradies and the key messages you need to understand.
What insurance policies are suitable for tradies?
There are four different policies that are relevant to most tradies: Public and Product Liability insurance, General Property insurance, Commercial Vehicle insurance and Workers' Compensation. Of course, there are other policies that may be relevant for your situation, particularly if you provide a specialised service, but these are the policies that are most commonly needed.
- Public and Product Liability insurance covers you when someone is injured or their property is damaged as a result of actions taken by yourself, your employees or subcontractors. It also provides cover for claims against faulty products you supplied or installed.
- General Property insurance covers you for loss or damage to your tools and equipment and can be extended to cover electronic equipment and machinery.
- Commercial Vehicle insurance covers the vehicles you use for your work.
- Workers' Compensation insurance is applicable if you have one or more employees and is a legal requirement.
What are the relevant take home messages for tradies?
With so many different types of insurance, it’s no surprise that many tradies become confused, resulting in being underinsured. One good example is where Public and Product Liability and Workers' Compensation are often confused. This can pose a huge problem for employers, because if they don’t have Workers' Compensation when they should, they can be heavily fined or receive a jail term. The take home message here is that you need to talk to your insurance adviser to ensure that you have all the relevant policies for your line of work.
Another point is that some tradies don’t take out insurance because they think it’s too expensive. This is a fair argument, but the savings you make by not paying premiums pales into insignificance when you deal with a disaster without the protection of insurance. The key here is that premiums are less costly than the alternatives, if the worst really does happen.
It is important that you are open with your insurance adviser and provide all relevant details, as well as any changes to your business model or operating conditions. Without these details, you might find you are underinsured or your claims are rejected.
So the overall take home message for tradies is find out what insurance cover you need, be honest about your working situation and keep paying your premiums. In your line of work, you can’t afford not to be insured.
To decide what type of insurance policies are suitable for your business, talk to an insurance specialist today. Contact Gary Fletcher.