Liability Insurance

A Tradie’s Guide to Public Liability Insurance

Tradies and sub-contractors have a lot to digest and understand when it comes to insurance. From trade to trade, and tradie to tradie, the sheer amount of unique risks to deal with can feel overwhelming. That’s where insurance advisors come in, to set you up with appropriate cover for the risks you face.

In this guide we’ll dive into public liability insurance, one of the more important types of cover you can have to protect yourself and your business.

What is public liability insurance?

Public liability insurance provides protection for your business against allegations by a member of the public (someone not part of your business) relating to an injury or property damage in connection to your business activities.

This is important, because whether it’s fair or not, as a business owner you may be held accountable for injuries that people have when they come into contact with your business. This could be labourers, customers, or even the general public. It also has nothing to do with whether you have employees or not, so public liability insurance for sole traders can be just as critical as it is for a large companies.

How much Public liability insurance costs varies based on the quantity and quality of the cover. However, as with most insurance, you’ll be very glad to have it if you ever find yourself in the position of using it.

Are tradies required to have public liability insurance?

While there aren’t too many business types that require public liability coverage by law, certain trades are the exception. For example, electricians in Queensland are required to hold public liability insurance to meet licensing requirements.

Generally speaking, any subcontractors should have their own public liability insurance as well. We often hear cases where a subcontractor believes they’re covered by a builder’s insurance, only to find out on the prickly end that that isn’t the case. Unless there is a specific provision made in the builder’s insurance policy, subcontractors usually aren’t covered.

Also, it’s often a contractual requirement for subcontractors to have public liability insurance in order to work on a site. Contractual obligations are always something to check over, especially when it comes to insurance.

Some clients will also require contractors to have public liability insurance before even entering the premises. So, as you can see, it can be a wise move to make sure you hold appropriate public liability cover.

How can public liability insurance protect tradies?

It’s not out of the ordinary for third parties to experience slips, trips, or falls around job sites. All it takes is for a client or passer-by to trip over something and injure themselves for a public liability claim to occur.

It’s also not uncommon for an accident or unforeseen circumstance to occur and cause property damage. That could be on the job site itself, or to a neighbouring premise. Anything from a sheet blowing off a frame, to a burst pipe or struck conduit.

If someone is injured or has their property damaged, they may well decide to make a claim against your business. You can be subject to costly legal fees on top of the cost of rectifying the damage or injury. That’s where public liability insurance comes in, to help cover those fees and costs.

Having suitable public liability insurance, you can rest easy knowing you’re protected against costly claims arising from a wide variety of possible accidents.

What happens if you don’t have public liability insurance?

If someone is injured as a result of your work or worksite, depending on the nature and severity of the injury, you may be required to pay for their recovery, rehabilitation, and replace lost earnings. Also, there are often various legal fees associated with such an incident. It’s a similar story with property damage as well.

As you could imagine, this can all add up very quickly and lead to financial troubles. However, if you do have public liability insurance, your insurer will manage your claim and appoint a legal counsel to assist you. In the event you are found negligent, your insurance policy can cover legal expenses and the third party’s loss.

Every trade business is unique, and many have complex risks that are not covered by off-the-shelf policies. At EWIB, we promise to work closely with you, to understand your work, and help you find the most suitable insurance for your trade business.