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What insurance do Electricians need?

As with any trade contractor before you begin operating your own business there are a number of different things you need to consider. One of the main things to consider is what insurance do electricians need? 

Don’t leave it to chance, before we get into the finer details we always recommend that people speak with a Broker that way you can get specific tailored advice to your business and cover is going to meet your needs as a business. Regardless of where you are in Australia, we will be able to speak with you – some of the main locations that we work with are Brisbane, Sydney, Melbourne, Townsville, Perth and the Central Coast. Now that’s out of the way, read on to find out what insurance do electricians need?


Public Liability Insurance

An electrician’s public liability insurance will only cover you for a small part of your business operation. When you are considering your insurance policies you should also consider all aspects of your business that could cause a significant financial loss to you if something was to occur.

Personal injury and property damage are usually at the top of the list because of the dollar value attached to a loss should it occur. For example, if you caused damage to a house, rectification work could be in the hundreds of thousands of dollars. Losses like this are best covered by a suitable insurance for electricians.

Most electricians will require a public liability insurance to be put in place before they obtain their electrical license. If you’re in QLD then you also have specific conditions that need to be included in your cover.


How much does liability insurance cost for electricians? 

An electricians insurance cost is dependent on a number of different factors and we work with each company and contractor on an individual basis to determine what your exposure points are and what we can do to mitigate the risk of a loss occurring. For example, if you consider that each contractor on a job site could be carrying $10,000 – $20,000 worth of specialty trade tools in the toolbox on their ute if they were stolen and you had to go out and replace everything the next day to keep working how will this affect your business? 

Each electricians insurance package will be different and each trade occupation is also priced differently so if you’re sitting around at smoko talking to other trades just remember that each trade can be priced very differently. To give you a ball-park figure of electrician public liability insurance policies would typically range between $500 – $1,000 per year based off an average turnover of approximately $100,000 – $250,000.


When should you put a policy in place?

This is a common question that we get asked quite frequently and there seems to be a common misconception that a head contractor or registered builder typically holds a liability insurance policy over the premises that you are working on – this is not the case.

You should consider having an electricians public liability insurance policy in place as soon as you register your ABN. Your risk as a business owner, sole trader or electrical contractor comes into place as soon as your ABN is registered and your intention is to start working. Even going to a job site to provide a quote or walking into a wholesale tool store could potentially lead to a claim being made against you. Most states will also require that you hold a public liability insurance as part of your electrical license. If you're in QLD, you also need to have a consumer protection extension on your insurance policy.

We understand that by the time you have purchased your tools, budgeted a couple of weeks of no income and filled the ute with a tank of fuel that most budgets can be stretched pretty thin. This is where it becomes even more important for you to have a suitable policy in place as you could be stopped right in your tracks if something was to occur and you were liable for the costs. Most of our insurers and premium funders allow our clients the ability to pay monthly which can typically help reduce the impact of your electrician insurance cost.

A liability insurance for electricians should be your top priority and then the additional policies that we listed above should also be considered depending on how you are planning to operate your business. As a business insurance broker, our goal is to work with you, provide advice and then work with you on putting a suitable insurance package together that covers you and also considers your budget as well.

Tools Insurance
Commonly forgotten and undervalued until such time something happens to your tools. The reality is most trade contractors should have tools of trade insurance policy in place. Especially in tough economic times, tradies tools are usually some of the most targeted due to their accessibility in the back of a vehicle or being left on a job site.

Personal Accident and Illness
When you are considering what insurance do electricians need there is a good chance that you haven’t considered an accident and illness cover. In most situations, your business can’t operate without you and when you are operating as a Sole Trader or don’t have staff you an usually ineligible for workers comp cover. Some tradies choose to take out a full scale life insurance or income protection policy however, as scary as it seems most don’t have any cover.

It takes a big commitment to you and your family to start a business and operate on your own, make sure you are covered appropriately in case something happens.

Professional Indemnity Insurance
Do electricians need professional indemnity insurance? In most situations and circumstances no, they don’t. However, in some situations or in a specific niche of your business you may need to consider this cover. For example, if you are quoting on a job that came through HiPages and during the time that you’re inspecting what work needs to be done and you provide some advice on how the work should be completed to which you then go and provide a quote for, professional indemnity insurance is not required for this type of work. 

Professional Indemnity insurance for electricians is usually required when you are charging a fee for inspections and reports. Some contractors may also require you under contract to hold professional indemnity insurance. These are generally the times when an electrician should have professional indemnity insurance.

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

Purchase up to six products under one Business Insurance Package. 

This is a common question that we get asked quite frequently and there seems to be a common misconception that a head contractor or registered builder typically holds a liability insurance policy over the premises that you are working on – this is not the case.

You should consider having an electricians public liability insurance policy in place as soon as you register your ABN. Your risk as a business owner, sole trader or electrical contractor comes into place as soon as your ABN is registered and your intention is to start working. Even going to a job site to provide a quote or walking into a wholesale tool store could potentially lead to a claim being made against you. Most states will also require that you hold a public liability insurance as part of your electrical license. If you're in QLD, you also need to have a consumer protection extension on your insurance policy.

We understand that by the time you have purchased your tools, budgeted a couple of weeks of no income and filled the ute with a tank of fuel that most budgets can be stretched pretty thin. This is where it becomes even more important for you to have a suitable policy in place as you could be stopped right in your tracks if something was to occur and you were liable for the costs. Most of our insurers and premium funders allow our clients the ability to pay monthly which can typically help reduce the impact of your electrician insurance cost.

A liability insurance for electricians should be your top priority and then the additional policies that we listed above should also be considered depending on how you are planning to operate your business. As a business insurance broker, our goal is to work with you, provide advice and then work with you on putting a suitable insurance package together that covers you and also considers your budget as well.

Tools Insurance
Commonly forgotten and undervalued until such time something happens to your tools. The reality is most trade contractors should have tools of trade insurance policy in place. Especially in tough economic times, tradies tools are usually some of the most targeted due to their accessibility in the back of a vehicle or being left on a job site.

Personal Accident and Illness
When you are considering what insurance do electricians need there is a good chance that you haven’t considered an accident and illness cover. In most situations, your business can’t operate without you and when you are operating as a Sole Trader or don’t have staff you an usually ineligible for workers comp cover. Some tradies choose to take out a full scale life insurance or income protection policy however, as scary as it seems most don’t have any cover.

It takes a big commitment to you and your family to start a business and operate on your own, make sure you are covered appropriately in case something happens.

Professional Indemnity Insurance
Do electricians need professional indemnity insurance? In most situations and circumstances no, they don’t. However, in some situations or in a specific niche of your business you may need to consider this cover. For example, if you are quoting on a job that came through HiPages and during the time that you’re inspecting what work needs to be done and you provide some advice on how the work should be completed to which you then go and provide a quote for, professional indemnity insurance is not required for this type of work. 

Professional Indemnity insurance for electricians is usually required when you are charging a fee for inspections and reports. Some contractors may also require you under contract to hold professional indemnity insurance. These are generally the times when an electrician should have professional indemnity insurance.


Should you use an Insurance Broker?

Having an Insurance Broker on your side could be a great benefit to your business. Insurance Brokers can be a great source of reliable information that is tailored to your business. For example, instead of just buying an insurance policy that you’ve been asked to get with a tender application, speaking with a broker they can give you specific policies that you may need to consider. Unfortunately, not knowing this information could lead to significant losses to your business down the track. Get the information first hand so you can make informed decisions about your business.


Can I package my policies together?

One of the great things about having an Insurance Broker managing your policies is that yes, we can bundle all of your policies together. That means we can bundle your electrician public liability insurance, tools, car, trailer and any other policies you may need together. We are also not limited to having to do this with the one insurer which allows us to get every single option from every insurer that offers the various insurance policies that you may need and put them together into one simple managed service. 

If you were to try and bundle other policies with your electrician public liability insurance with other insurers then you may be limited to just using their policies which typically work out more expensive. The other option would be to contact multiple insurers, have multiple direct debits set up, renewing policies at different times throughout the year. Our simple solution can have one of our experienced Broker’s managing all of your insurance policies, have them renewing at the same time as your other policies and bundle them up with premium funders to offer one simple monthly repayment for all policies. We aim to make your life simple, our full service insurance agency can take care of all of your insurance requirements with no hold music, no waiting days for certificates, good old fashioned service.
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.


Priority Insurance Brokers, ABN 95 655 563 616, AFSL 233750

This article originally appeared on Priority Insurance Brokers Blog and has been published here with permission.

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