There are many types of insurance that builders in Australia should consider. Some types of cover such as public liability will be mandatory for most builders, whilst other types of cover are optional.
Builder’s insurance is designed to protect builders financially from the various risks they are exposed to on a daily basis. Some risks are relatively minor in their financial impact, such as having a tool stolen, however some can be financially devastating, such as causing a death or serious injury through your work.
Here we will run through the various types of insurance for builders and how they can protect you, your business and your family from the financial risks you face.
Builders Public Liability Insurance
Public liability insurance is one of the most commonly used covers by builders. The cover is designed to protect you from any loss or damage caused by your work.
There are two parts to a public liability policy – property damage and personal injury.
Property damage covers any loss or damage caused to someone’s property. A minor claim may involve $500 worth of damage caused on a worksite, whilst a major claim may involve serious structural damage – or even complete destruction – of a building.
Personal injury claims are generally more serious, and involve and death or injury that is inflicted upon another person as a result of your work. A minor claim could result from someone tripping on a power cord and spraining an ankle, whilst major claim may involve the death or permanent disability of someone due to something you’ve done on the
Builder’s public liability insurance is mandatory in all Australian states and territories for licensed builders. Not only is mandatory to have, but it also a great idea given the financial protection it gives to you and your family. The cover is also very affordable in most cases.
Builders Tool Insurance
A builder’s tools are one of the most important parts of their business. If your tools went missing overnight, how would you feel about coughing up thousands – if not tens of thousands – of your own hard earned money to replace them?
Tool insurance can’t stop your tools from being stolen, but it can provide the cash to replace your tools without having to dip into your own pocket.
Builder’s tool insurance policies do differ from one company to the next, but generally the insurance will cover you tools against theft from a secure location, fire and water damage, and damage caused by a motor vehicle collision or rollover.
There are some tool insurance policies that will cover your tools against accident damage and theft from a non-secure location, however these policies are generally more expensive. Despite the higher premiums, many builders choose to pay the extra amount for the extra protection it provides to them.
A basic tool insurance policy is generally very affordable, so even if you don’t take out the top-of-the-line builders insurance it is still a great idea to have some tool cover.
Builders Income Protection Insurance
Income protection insurance is a must for self-employed builders who don’t have access to sick leave or other benefits. In most cases if a builder cannot work, they cannot earn money.
Builder’s income protection insurance works by replacing up to 75% of your income in the event that you cannot work due to injury or illness. The policy will pay you a monthly benefit until you can return to work, or until your benefit period ends, whichever is sooner.
Although it is one of the most important types of builders insurance, income protection is often not properly looked at until it is too late. Income protection policies can differ greatly between the different insurance companies, and having the right policy can make the difference between having a claim paid or denied.
Some cheaper income protection policies will require that you are completely incapacitated for the full waiting period before they will pay a claim, whilst many of the better policies are much more flexible in the way that they allow you to claim.
Sickness and accident insurance is often confused with income protection insurance, however there are some important differences that all builders should be aware of. Generally speaking, sickness and accident insurance is an inferior type of cover, and it is important to do your research of speak to a financial adviser to find out how the differences in these builders insurance policies could affect you and your family.
Builders Life Insurance
Running a building business is generally a very capital intensive operation, and for that reason many builders carry a large amount of business debt.
There is nothing wrong with debt provided that you can keep up the repayments, but what would happen if you were to die? Would your family have enough money to payout your business and personal debts? Or would they have to start selling assets to make ends meet?
Life cover is one of the most important types of builders insurance for any builder with debts and a family.
Builders TPD Insurance
TPD insurance is very similar to life insurance in the way that it pays out and the ways that it helps you and your family, but instead of paying out when you due, TPD insurance pays out when you become totally and permanently disabled.
As far as a builder’s capacity to earn income goes, generally becoming totally and permanently disabled will have the same impact on their income as their death would – the income would simply stop.
A combination of TPD and income protection builders insurance can protect against the devastating financial effects of suffering an illness of injury so serious that you become permanently disabled and can no longer work at all.
Builders Trauma Insurance
Trauma insurance is probably the one type of builders insurance that is most commonly overlooked.
This type of builders insurance covers you for most medical traumas and critical illnesses such as stroke, heart attack and cancer, and will pay you a lump sum which can help to cover medical expenses and lost income.
As builders we like to think we are indestructible, but critical illnesses can occur, especially as we reach middle age and beyond. Trauma insurance can help to take the financial sting out of such events.
As we can see, there are many different types of builders insurance covers available to protect builders from the financial risks they face every day.
Some of these covers will be more important to some builders than others, and it’s important to have a builder’s insurance package that suits your needs and objectives, as well as your budget.
To get a quote on your builders insurance simply give us a call or complete our online quote request.