Insurance For Contractors
- Public Liability And Portable Equipment Cover
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Why do Contractors need to consider insurance?
Working as a contractor is exciting. You have more freedom to choose when you work, the projects you work on, and the clients you work with. These are just a few of the perks that go along with being your own boss!
But like any business, there are risks that go along with working in the trades industry. A mistake or accident might threaten to bulldoze what you’ve built. Insurance could help you avoid this.
Different types of contractor insurance can help protect you and your small business. Insurance cover minimises common risks that you are likely to face while on the job, such as accidentally damaging a client’s property, having your tools stolen, or missing work due to an injury.
Contractor insurance may even be a key factor in getting hired. Many clients simply refuse to work with contractors who do not have their own insurance in place. It may even be a requirement to become a licensed contractor in your state or territory.
Did you Know?
Some contractors and members of trade associations may be required to hold minimum levels of Public Liability insurance to become licensed and work. A contractor insurance package could help you meet these obligations and protect other areas of your business in a way that is convenient and affordable.
What Insurance Do Contractors Need?
As a contractor, there are many potential risks to shield yourself against. These are common forms of cover that many contractors consider for their small businesses.
Public Liability Insurance
Many contractors regard Public Liability insurance as an essential form of cover for their business.
Public Liability insurance is designed to provide protection for you and your business if your negligent business activities cause property damage or injury to a customer, supplier or a member of the public. These types of third-party claims are potentially expensive for contractors, which is why policies typically include compensation costs to the wronged party, as well as your legal and defence costs associated with a covered claim.
No matter how careful you are, accidents still happen. There doesn’t need to be a huge disaster to cause a public liability claim. Even a simple mishap, such as someone tripping over a toolbox, could result in a major headache (or worse) for your small business.
Professional Indemnity Insurance*
Contractors who provide advice or a specialist service often buy Professional Indemnity insurance*.
Professional Indemnity (PI) insurance is designed to protect your business against claims that result from actual or alleged negligent acts or omissions in the delivery of your professional service or advice. PI Insurance will also assist with the legal costs associated with responding to or managing claims that the policy covers.
While you likely carefully check and re-check your work before delivering it to a client, mistakes can slip through. Professional Indemnity insurance for contractors helps protect you if this happens. It also helps shield your business against claims of negligence, breaches of duty, failing to meet deadlines, and other forms of professional wrongdoing.
Portable Equipment insurance*
Protecting the tools you use might be a consideration for your contractor business.
Portable Equipment insurance (also known as General Property insurance) covers you for loss and damage to items of portable equipment associated with your business. These can include tools of the trade, business equipment or electronic items, and items of stock.
Many contractors, particularly those working in the skilled trades, have specific tools that they need to do their job. If these tools are stolen or damaged, replacing them might be expensive. Your business reputation might also suffer, particularly if you are unable to finish a project because you can’t afford replacements.
Personal Accident and Illness insurance*
It may be wise for contractors to protect their ability to earn a paycheque with Personal Accident and Illness insurance.
Personal Accident and Illness insurance can provide a weekly benefit for loss of income if you are unable to work because of an unexpected injury or illness (even if it occurs outside of your employment). Your policy can also provide assistance should you become permanently disabled or pass away as a result of an accident.
Your physical health is important, and for many contractors, it directly affects the ability to do your job. If you were left unable to work because of an accident or illness, would you be able to pay the bills until you’re back on your feet? Personal Accident and Illness insurance could give you valuable peace of mind, knowing that you’d be taken care of if the unexpected happens.
Tax Audit insurance*
Contractor insurance packages can be customised to include Tax Audit insurance.
Tax Audit Insurance covers specified costs if a business is chosen by the Australian Tax Office for auditing. The policy provides coverage for the costs of accountants and other nominated professional fees incurred during an audit.
Managing complex cash flows during the financial year is complex work. Though you may work hard to keep your books in order, crunching the numbers is often complicated and creates the opportunity for mistakes. There’s always a chance that the Australian Tax Office (ATO) could select your small business to be audited. If this happens, Tax Audit insurance for contractors can help you hire an outside accountant to assist with the process.
Who needs contractor insurance?
Contractors enjoy a lot of freedom in how and when they work. You are able to accept or reject projects as you wish, building a work schedule and environment that suits your individual needs.
However, there are legal obligations that your clients may ask you to meet before they work with you. Having minimum levels of business insurance might be one of them.
Businesses often require the contractors they hire to have their own Public Liability insurance in place. This requirement is typically written into the business contract you sign and may specify a minimum level of coverage that you must keep.
Depending on the industry you work in, clients may also expect you to have Professional Indemnity insurance. This requirement usually applies to professions that provide expert advice and services, such as accountants and bookkeepers, consultants, and engineers.
Even if your clients do not expect you to have your own insurance policies, they might still come in handy. Insurance for contractors helps protect different areas of your business. Instead of spending your hard-earned money on claims, you can rest easy knowing that your coverage could pick up the bill instead!
Getting the Right Insurance for Contractors
Public Liability Australia lets you tailor your contractor insurance to suit your needs. There is a variety of cover options available to help manage risks to your small business, including Public Liability insurance, Portable Equipment cover, and more.
No two contractor businesses are alike, which is why we offer a range of coverages to address the unique needs of your small business.
Protecting your business has never been easier. With just a few clicks or a quick phone call, you can compare multiple quotes from some of Australia’s leading insurers.
* This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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