The building industry is made up primarily of tradesmen, many of whom are subcontractors and business owners.
Many tradesmen are required to have insurance in order to obtain their licence or to get onto certain worksites.
Trades insurance is not just a single form of insurance. Instead, the term relates to a range of insurance covers that suit tradesmen.
Some of the common forms of trades insurance include public liability and income protection, and to a lesser extent tool insurance and life insurance.
In this guide we will take a look at some of the most popular forms of insurance for tradesmen, what they cover you for and who needs them.
Income Protection
Since such a large number of tradies in the building industry are self-employed or subcontracting, many do not have access to sick leave or worker’s compensation.
To combat this, many building companies have mandatory income protection insurance for their subcontractors.
Income protection insurance can replace up to 75% of a tradesman’s income for a period of time if he cannot work due to injury or illness.
You can find more information about this cover on our income protection insurance page.
Public Liability
The most commonly required form of insurance for tradies in the building industry is public liability insurance.
Public liability protects tradesmen in the event that their work results in property damage or personal injury to another person.
A subcontractor will not be covered for such damage by the building company, which means that they must have their own public liability cover in place.
More information on this form of cover can be found on our public liability insurance page.
Tool Insurance
Whilst tool insurance is not mandatory for any tradesmen, however it is still a very important and popular form of cover for tradies.
Since most tradesmen rely so heavily on their tools in order to earn a living, it is important to protect them. A tool insurance policy can cover tools for theft as well as damage from fire, storm or vehicle accident.
Not all tools policies are equal, with some not even covering theft. For this reason it is important to read the policy documents carefully before choosing a policy.
Other Trade Insurance
Income protection, public liability and tool insurance are certainly the most common forms of insurance for builders and tradesmen, there are a number of other covers worth considering.
Life insurance, TPD insurance and trauma insurance are all important covers, and tend to be more popular with workers who have a family to support along with other major financial responsibilities.
Some builders will also require contract works insurance. This cover isn’t required by most tradesmen unless they are taking on major building projects on their own.
Here at Builders Insurance we strongly recommend that people speak to their insurance broker and financial adviser to work out exactly which types of cover they require.
If you do not have an existing insurance adviser, you can click on the quote button on our website and we will try to put you in contact with a suitable professional who may be able to assist you.
Another option for tradesmen is to use a specialist tradesman insurance firm. One such firm is Trade Risk who look after tradies all over Australia. Follow the link to their website for more information.