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, your company and your people (and their families) wide open to a range of risks that can be financially devastating.
At Risk Guidance Insurance, 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 to an inability to recover from financial losses.
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
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 is the Relevant take-home Message? 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.
Another point is that some tradies don’t take out insurance because they think it’s too expensive. This is an understandable natural thought for many to have, but the savings that you may 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 (especially after reviewing this as a business expense, tax consideration), than the alternatives- If the worst does happen!
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 to adequately protect yourself, your business and your people & their families.
General Advice Warning The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.