Subcontractor Insurance
Requirements In the construction industry it’s very common for workers to operate as subcontractors, and it’s important to know your insurance requirements.
This means you are largely responsible for your own actions, and if something goes wrong, you could be financially exposed.
In this guide we’ll be looking at a range of common questions relating to subcontractor insurance requirements within the Australian building industry:
For this reason there are a number of different insurance types required by subcontractors in Australia.
• Do I need insurance as a subcontractor? • What insurance do you need as a subcontractor? • Do subcontractor insurance requirements vary by state? • Does it matter if I’m a sole trader or company? • How much does subcontractor’s insurance cost? • How much public liability do subcontractors require? • Are subcontractors covered by my insurance? Do I need insurance as a subcontractor? As a subcontractor you are running your own business, even if it’s just you as a sole trader.
What insurance do you need as a subcontractor? There are two main forms of insurance required by subcontractors. These are public liability insurance and income protection insurance. Depending on your business activities you may also require professional indemnity insurance, but this is less common for most typical building trades. Public Liability Insurance The most commonly required form of subcontractor insurance is public liability. Public liability insurance will respond in the event that you cause property damage or personal injury to a third party. A third party could be your client or a member of the general public. Minor claims for public liability
generally relate to property damage. For example you might be working in a roof and put your foot through the ceiling. As a subbie you’d be responsible for the cost of repairing and repainting the ceiling. Larger claims typically relate to personal injury, and climb into the hundreds of thousands (or even millions) if you cause serious injury or death to another person as a result of your negligence. It’s important to remember that you won’t always be covered by the main contractor’s insurance. If you are the one found to have been negligent, you are the one who will be held financially responsible. For this reason, many building companies and contractors will have strict requirements in place that all subcontractors hold their own suitable public liability cover. Even if the company engaging your services does not require that you hold public liability insurance, it is still incredibly important for your own protection.
2019 August Issue | 19
