When a tradie turns up to your property to build or fix something there is always the potential for an accident to happen, even if they’re experts.
It’s not mandatory in Australia for tradespeople to have tradesman insurance, apart from electricians and plumbers. But if they have it, it means that you, the homeowner, are protected in the event of property damage or personal injury.
For that reason, it’s important that you check a tradesperson has the proper insurance before hiring them, so you’re not at risk of paying for damages, or costs associated with injury claims or legal action.
What is tradesmen insurance?
Public liability insurance is the most important cover that tradies should have. This insurance covers the cost of damage or injury to a third party, namely, the homeowner, their family or visitors to the property. It provides cover for the repair or replacement of damages to property, cover for medical expenses due to injury and rehabilitation, and in the worst case scenario, compensation for injury or death.
As a tradie is financially liable for damage and personal injury, if they don’t have insurance it can be difficult to get any compensation from them or the company they work for. One option is to take them to court to get compensation for repairs or medical expenses, but if the tradie declares bankruptcy then you’ll get nothing.
Since you’re exposed to considerable risk using uninsured tradespeople, it’s better to avoid these altogether and only work with those who do have insurance.
Insurance For Tradesmen Tools
Another type of insurance that tradies often have is tool insurance in the likelihood of theft or accidental damage to their tools.
If your tradie rings up and says they can’t work because their tools have been stolen and they can’t afford to buy new ones, then this holds up your project and causes inconvenience to other trades working on it.
If you’re running to a tight time schedule you’ll have to go searching for another tradie to do the work who may cost more.
However, this can all be avoided if the tradie is covered by tool insurance in the first place. Then the tools can quickly be replaced without too much hassle to either party.
Cost of Tradesman Insurance
Many tradies believe they need insurance but neglect to take out a policy because they deem the cost of premiums are too high.
But as the people at Trade Risk say “when you consider that adequate insurance would cost around $40 per month for most of these tradies, there is just no excuse for putting clients at risk by working without insurance”.
How much a tradie will pay in premiums for public liability insurance depends on the size and scope of the business. Electricians and plumbers may pay higher premiums because of the riskier nature of their work.
For a sole-trader tradesman in a lower risk trade, public liability insurance can start from approximately $500 pa, while tool insurance can start from approximately $150 pa. Other types of insurance that tradies can have are commercial vehicle insurance and personal accident cover which can start from approximately $1,000 p.a each.
Public liability and tool insurance are generally packaged together, while commercial vehicles and personal accident are under separate policy. Some insurance companies may offer tradesmen ‘packs’ that feature two or more policies so tradies are just paying one combined premium per month.
Most good tradespeople will have the right insurance in place, so it’s your job to check this when you’re asking for a quote.
At Bricks+Agent our service providers list the insurances they have on their profile so this makes hiring a lot easier. Visit our homeowners hub today to list a job and receive quotes by local professionals.
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