Tradies Insurance Made Simple: Considerations for Getting Covered

What is Tradies Insurance?

Tradies insurance is a type of business insurance crafted specifically for tradies. It is designed to cover some of the risks that tradies come face to face with both on and off site. Keep reading and we’ll see if we can answer all your questions about the details.

Imagine a plumber installing a new faucet in a client's kitchen. Despite taking great care, while working they bumped an existing pipe, causing a small crack. The crack goes unnoticed for a day or two, but then a leak develops, causing serious water damage to the client's kitchen cabinets and flooring – this sounds like an incident that could turn into a legal nightmare.

Insurance doesn't cover all losses, and for your insurer to decide whether a claim is accepted, they need extensive information—much more than a few lines about a plumber and a cracked pipe. Claims are crucial because they are the moment when your tradies insurance product proves its value. We'll explore claims in greater detail in a future blog.

When your insurer provides coverage, it can include legal costs for defending your position and compensation payments to third parties. Liability claims, though infrequent, can be severe, highlighting a fundamental principle of insurance: everyone contributes a little, so no one has to bear a substantial burden alone.

Who Tradies Insurance covers.

Tradies insurance can cover many different types of occupations. This can vary depending on the insurance company in question, but tradies insurance usually includes traditional trades such as:

• Carpenters
• Electricians
• Plumbers
• Builders
• Painters
• Handymen
• Plasterers
• Bricklayers
• Air Conditioning Technicians
• And more

Some insurance companies (Including us!) choose to also cover other skilled workers including:

• Gardeners
• Landscapers
• Cleaners
• Tiler
• Lawnmowing
• Locksmiths
• Some tree fellers and tree surgeons

Not all tradies are the same - tradies are often practical and multi-skilled, and sometimes you might perform activities that cover the scope of multiple trade occupations. The activities that insurers will consider coverage for will be limited to those that you disclosed when you take out your tradies insurance policy. If you disclose a single occupation e.g. Plumbing, including gas fitting, where in fact you’re performing multiple e.g. carpentry work that is not part of the usual plumbing activity, you could be putting yourself at risk of not being covered if you don’t disclose both occupations.

Some tradies insurance policies understand the practical, multi-skilled ways of the tradie and consequently allow you to disclose and select multiple occupations.

Do I really need Tradies Insurance?

Sorting out insurance can be seen as a hindrance that tradies need to break through, or a grudge purchase that just adds to the bills. In reality, insurance for tradies is just as crucial as it is for any other business. It means that when incidents covered under your insurance happen, the insurer can assist you. It provides confidence and peace of mind. It allows you, as the business operator to feel more comfortable, focusing on the technical aspects of the job and growing your business, with less risk of an unforeseen event wiping out all your years of hard work. Tradies Insurance can be a key component of a well-functioning tradies business.

This is particularly true for sole traders, partnerships and small companies; without coverage, one little slip up could bring your business back down to the ground from which you built it up.

Wait, what does Tradies Insurance actually include?

The types of coverage of insurance for tradies depends on the trade in question and the tradie’s preference for coverage. Tradies insurance almost always includes some form of legal liability insurance, tools insurance, and sometimes tax audit and personal accident insurance.

Legal Liability Insurance

It is not fair on anyone that one small mistake can take down an entire business, but without Legal Liability Insurance, this is exactly what could happen. Legal Liability Insurance is designed to provide protections from third party negligence claims that arise as a result of your work or products. Legal liability for tradies includes two types of coverage: public liability insurance and products liability insurance.

Products Liability Insurance.

Products Liability is designed to cover claims made against your business where a third party is injured or sustains property damage as a consequence of products sold or supplied through your business activities. It is very similar to public liability insurance in the sense that it covers you for third party claims against you.

Can I take out Public Liability but not Products Liability?

For tradie businesses, these covers are almost always sold together as a package, but most insurers understand occupation specific risks quite well and charge a premium with consideration to their understanding of the risk.

What is Tools Insurance?

Tool insurance and Tools of Trade Insurance are different names for the same thing; insurance for your toolkit and other equipment. Tools insurance is intended to financially assist you in situations where your insured tools are stolen or sustain damage or loss caused by an insured event. It is another method tradies should consider using to safeguard their tools and their livelihood.

Every tradie knows the importance of their tools in their job and that they are worth protecting. For many tradies, no tools will likely mean no work and for self-employed tradies especially, this can mean no income. This is true particularly as of recently, as cases of tool theft are unfortunately becoming more common in Australia.

Click here to read more.

What about cover for apprentices?

And don’t worry; apprentices can get covered too. Apprentices that you employ usually fall within the same definition as other employees. This can help with your tools insurance once the tools are insured, as it doesn’t matter who in your business uses them- whether it be the seasoned tradie or the eager apprentice.

And cover for trailers and other large equipment?

Some tradies insurance providers will allow you to cover trailers and large equipment for property damage under the Tools of Trade cover (Including us!).

What is Audit Insurance?

Audit Insurance is designed to cover costs such as accounts fees incurred from an audit by the Australian Taxation Office (ATO). Having audit insurance can allow you to go without the stress and cash flow constraints from paying unexpected fees in attending to an audit. And remember, audits are not only reserved for businesses with questionable bookkeeping - the ATO audits and reviews any tax paying entity at their discretion, regardless of fault, evidence, or suspicion.

Despite this, audit insurance is occasionally overlooked by tradies, sometimes to their peril.

Is Tradies Insurance compulsory?

Well, usually not…

Even though it is not always mandatory, many clients and head contractors will not allow you to step foot on site until you have proven you have the appropriate legal liability insurance.

…But sometimes.

As with a lot of things in insurance, there are exceptions. In some states, you will need to meet specific insurance requirements before you can get a license for a particular trade. For example, in Queensland, according to the Electrical Safety Regulation 2013, to get your electrical contracting licence you will need to give the regulator evidence that you have:

• Public and Products Liability Insurance of at least $5,000,000, and
• Consumer Protection Insurance of at least $50,000

How can I prove that I’m insured?

When you take out cover, most insurers will issue you with a document called a Certificate of Currency - this acts as your proof of cover which you can show clients and contractors alike.

Certificate of Currency.

A Certificate of Currency (CoC), also known as a Certificate of Insurance, is a formal document produced by your insurer that can show the level and types of cover that you have in place, the effective dates of the policy, and that it’s paid for.

It is recommended to keep a digital copy on hand so that you can swiftly send it to any clients or head contractors, as well as a physical copy somewhere safe. To get a Certificate of Currency, simply contact your insurer.

Things to consider when choosing Tradies Insurance.

Service includes elements like:

• Monthly payment options - do you incur interest charges when paying by the month?
• Accessibility of service personnel – can you call and speak with someone relatable and have a pleasant user experience?
• Convenience – tradies get up early and are busy on site during typical business hours. Can you get service at a time that works for you?
• Access to important documents – can you access important documents when you need them?
• Claims service – incurring a claim can create stress and anxiety. Are you able to speak with a person when you need to lodge a claim?

It is ultimately up to you to decide which insurance will fit you best. Be sure to read the relevant policy wording or product disclosure statement for the products you consider.

Anything else?

If there was anything else you would like to know, be sure to check out our frequently asked questions.

About the author - VIZ Insurance

VIZ Insurance is a tradie focused insurance agency. We understand that after a long day the last thing you want to deal with is tedious and confusing insurance. That's why we provide specialised insurance for tradies that is designed to be quick, easy to understand and highly relevant.

No waffle, just clear policies that tell you exactly what you're covered for. Get quoted, and once you have decided what’s best for you, get covered and back to work.

This article is for information purposes only and is not advice. When considering VIZ Insurance, you please read the Policy Wording to ensure the product is right for you. All product information contained within this website is subject to policy terms and conditions (including exclusion and limitations). Your use of VIZ’s website is subject to the website Terms of Use.