As a self-employed subcontractor, you are typically considered an independent business. This means you may be responsible for anything that goes wrong, which makes having suitable liability insurance essential to protect your business.

Also, many self employed  sub contractors operate as sole traders.  Unlike larger businesses, sole traders may be personally liable for any financial or legal claims made against them. Without the protection of a corporate entity, these claims can directly impact your personal and family assets. Given the risky work involved in many trades this makes appropriate business insurance crucial.

Here are some of key commercial insurance policies subcontractors in Australia should consider:

Public Liability Insurance *

Public liability insurance is a vital cover as it may protect subcontractors if their work results in injury or property damage to a third party. For example, if a carpenter accidentally damages a client’s property, public liability insurance may help cover legal costs and compensation.

Why consider it: Working in client spaces or public areas introduces risks that could lead to claims. This type of coverage may help you manage such liabilities.

Business Insurance Pack *

Business pack insurance offers a comprehensive option for sub contractors who require multiple types of cover in one package. This policy may bundle together various types of insurance, such as public liability, commercial property, fire, theft, glass, and business interruption, depending on your needs. This type of cover may be beneficial for sub contractors who have a commercial premises and wish to protect multiple aspects of their business operations under a single policy, offering both convenience and flexibility.

Commercial Vehicle, Tools and Equipment Insurance*

Commercial vehicles, Tools and equipment are indispensable for many subcontractors.

Commercial vehicle insurance can provide protection against vehicle accidents while Tool insurance may cover the cost of replacing or repairing tools if they are lost, stolen, or damaged. For instance, a tradesperson carrying expensive equipment may face financial strain if their tools are stolen from a worksite.

Why consider it: Disruptions caused by an accident involving your commercial vehicle or the loss of tools could impact your ability to work, and insurance may offer a way to reduce financial stress in these situations.

Personal Accident and Sickness Insurance* 

If you’re unable to work due to illness or injury for an extended period, Personal accident and sickness insurance may provide financial support by replacing a portion of your income. This coverage may help you manage ongoing expenses while recovering.

Why consider it: Subcontractors don’t usually have access to paid leave, so having Personal accident and sickness insurance may help you maintain financial stability during periods when work isn’t physically possible.

Professional Indemnity Insurance *

Subcontractors who provide advice for a fee may face claims of negligence if their work causes financial loss to a client. Professional indemnity insurance may cover legal expenses and compensation in such cases.

Why consider it: This insurance may be particularly useful for subcontractors in consulting, design, or other professions where their advice or expertise is a core part of their services.

Workers Compensation Insurance *

Subcontractors who employ others may need workers compensation insurance to meet legal obligations. This policy provides financial protection for employees if they experience work-related injuries or illnesses.

Why consider it: Workers compensation insurance is mandatory in Australia if you have employee. It may help ensure compliance with regulations while offering financial support to affected employees, potentially reducing risks for your business.

Additional Coverages for sub contractors  *

• Cyber Insurance: Subcontractors managing digital records or client information could consider cyber insurance to mitigate risks from data breaches.
• Stock Insurance : May cover loss or theft of stock.
• Marine Cargo Insurance : May cover damage, loss or theft of stock in transit.

Reviewing Your Insurance Needs *

The policies you choose depend on your specific trade, work environment, and business setup. Consulting with a business insurance broker may help you identify risks and find suitable coverage for your business activities.

Final Thoughts *

Appropriate business insurance can play a significant role in reducing financial risk for subcontractors. Taking the time to understand your options and seeking expert advice may help you make informed decisions to protect your business and livelihood.

Disclaimer: The content of this blog article is intended for general informational purposes only and should not be considered as professional advice. While we strive to ensure accuracy, we make no guarantees about the completeness or reliability of the information. For guidance regarding what and how much insurance cover you need, we recommend consulting with a business insurance broker. Any actions you take based on the information provided here are at your own discretion.