Do you have the right tradies liability insurance for your business? Things to consider when reviewing insurance policies.
Author: Natasha Golden, Principal Insurance Broker for the Marsh trades team
As the principal insurance broker for the Trades team at Marsh and wife to a tradie myself, I know first-hand that not all plumbers liability policies are an apple for apple comparison. Whether you’re a new entrant looking for plumbers insurance or considering a review of your current policy, the team and I have developed the following tips for when it comes to finding a cover that’s the right fit for your trades business.
It’s all in the prep work
Most tradies will agree that without the proper attention to the prep stage of your work, you could be hurting the success of the job down the track. Well, the same goes for tradies liability insurance!
Before comparing a new insurance solution, it’s important to gain a strong understanding of your business risks. These risks can vary from ones that may cause major disruptions to those that will only have a minor impact on business operations.
Jot down a list of all the day-to-day risks that may arise as a tradie, making sure to also include those that may occur on less frequent services. Remember, while many building risks may involve damage or injury, they can also be in relation to client product advice offered as part of your service.
Tip: Not all public liability insurance policies will cover tradies for work completed on buildings over two storeys high. Be sure to include this in your risk assessment if you or a licensed trades employee in your business performs this type of work.
As well as reviewing your business risks, it’s equally important to know the insurance requirements set by the state or territory in which your business operates. In Victoria for example, plumbers must have compliant public liability insurance to receive or renew their licence. While liability insurance may not be compulsory in other states, if you were to cause accidental damage to a person or their property as a self-employed plumber, you could be liable to pay a substantial amount in compensation.
Comparing insurance policies
With your risk assessment in hand, it’s now time to find an insurance cover that is best suited to you and your trades business.
Things to review when obtaining quotes:
- Limit of liability – This is the maximum amount that can be received under the insurance policy for a successful claim.
- Excess - The sum paid by you in the event a claim is made on the insurance policy.
- Inclusions - Does the policy include cover for all your business risks? For instance, claims cover for providing the incorrect product advice or liability cover for construction sites over two storeys.
- Exclusions: These are situations or events not covered under the policy. Insurance providers can offer different cover terms in their policies, so through research, you may find a policy that’s more inclusive to your business risks over others.
All this information and more can be found in the policies’ Product Disclosure Statement (PDS). Every policy will have a PDS that you can refer to as the insurance policies single source of truth.
Tip: Be aware that insurers can often assess domestic and commercial work differently so ensure you correctly declare your activities.
Be careful not to compare insurance solely on premium
The price of your insurance plays a big role when comparing different policies, however, tradies should consider completing a side-by-side comparison of the available options before making their decision. Much like your work tools, the last thing you want is to get caught out on-site with a policy that doesn’t do the job correctly.
Insurance providers can base a policy’s premium on the risks they take on and having a high number of exclusions can reduce these risks, which should result in a lower premium. In addition, be careful to ensure your policy complies with the local regulations and mandatory requirements – e.g. Victorian Building Authority. All this should be taken into consideration when comparing insurance quotes.
If in doubt, ask
Choosing a liability insurance policy for your trades business is an important decision and can sometimes mean the difference between being covered for a specific risk or not. If you have questions that can’t be found online, give your insurance advisor a call to ensure you thoroughly understand the insurance solution on offer.
At Marsh, we have a dedicated team of expert insurance advisors that are available to help answer your questions in respect of your insurance requirements including tradies insurance.
Alternatively, you can speak to one of our experts on 1300 300 511 to learn more.