Public Liability Insurance for Subcontractors

Public liability insurance for subcontractors may protect you from paying financial compensation that is ordered by a court when you are found liable for a claim for damages or injury.*

Self employed subcontractors are regarded as separate businesses, and it is recommended that you have your own public liability insurance to ensure adequate protection.

Even if you are a tradie, such as a carpenter, plumber, electrician, tiler, or painter, and you work as a subcontractor for a builder, project manager, or even another trade business, you require your own liability cover.

What is Public Liability Insurance?

Public liability insurance is designed to protect you in situations where your subcontracting business activities result in damage to someone’s property or injury to another person. Without this cover, you may be exposed to significant financial risks, including compensation payments and legal costs.

Why Subcontractors Need Public Liability Insurance

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 your own public liability insurance essential to protect your business.

Another key reason subcontractors need public liability is that most builders and project managers require proof of public liability insurance before allowing subcontractors to commence work on-site.

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 public liability insurance essential.

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What Does Public Liability Insurance Cover? *

While specific coverage depends on your policy, public liability insurance for subcontractors in Australia generally may include:

It’s important to review your policy and consult with an insurance broker to ensure your cover aligns with the specific risks of your trade.

Liability Risks Subcontractors Face *

Self employed sub contractors, regardless of their specific trade, may encounter liability risks during their work.

As a sub contractor, it’s your responsibility to address any issues related to your work. Additionally, you could face legal action or an insurance claim if things go wrong. Here are some common liability risks sub contractors may face on a job site:

– Slips, trips, and falls.
– Harm caused by objects being projected or falling.
– Harm or damage from tools and equipment being misused.

Given these potential liability risks, public liability insurance is designed to help sub-contractors mitigate possible financial losses stemming from these common sub-contracting risks.

Benefits of Public Liability Insurance for Subcontractors *

Having public liability insurance may offer sub contractors financial protection and support if a liability claim arises. The potential benefits of this cover include:

– Financial Protection: May cover compensation for third-party property damage or injury, reducing the financial impact of a claim.
– Compliance with Client Requirements: Many builders and project managers require subcontractors to have their own liability insurance before starting work.
– Business Continuity: Minimises the financial impact of unexpected claims, allowing you to focus on your work.

Do You Need Public Liability Insurance by Law? *

In some industries, public liability insurance may be a legal requirement, particularly if you operate under a state-issued licence. For instance, electricians in Queensland and plumbers in Victoria have mandated requirements.

Public liability insurance may also be a stipulation in contracts with government or private clients, or it might be required as part of lease agreements for renting commercial premises. Ensuring compliance with these obligations helps protect your business from potential legal and financial risks.

Does It Matter if I’m a Sole Trader or Company? *

Whether you operate as a sole trader or through a company, the requirements for public liability insurance remain the same. Insurers typically consider both structures as self-employed, meaning the coverage and costs are consistent across these business types. However, some differences may exist in other insurance types, such as workers’ compensation, depending on the business structure and state-specific regulations.

Are Subcontractors Covered by My Insurance? *

If you engage subcontractors, your public liability insurance will generally not extend to cover their activities. Subcontractors are typically viewed as independent businesses, and they are usually required to arrange their own public liability insurance.

How much is Public Liability Insurance for a Subcontractor?*

Public Liability Insurance cost for a subcontractor will depend on various factors including the size of your business, the type of work you do and the types of clients you service.

For subcontractors that:

Work on Commercial Building Sites

Have Employees

Work for councils or government departments and require 20 mil liability costs will be higher.

*Important : the above is a guide only; pricing may vary significantly from the above based on your size, clients, experience and gardening business activities.

How Much Public Liability Coverage Do Subcontractors Need? *

The amount of cover depends on your business size, risks, and client requirements. For instance:
– $10 million cover is common for many self-employed subcontractors in Australia.
– $20 million cover may be required for subcontractors working with body corporates, councils, or commercial property owners.

Consulting an insurance broker may help you obtain suitable coverage for your subcontracting business activities.

Are Tools and Equipment Covered? *

Public liability insurance typically does not cover tools or equipment. For these, you may need separate equipment insurance or a business insurance package that combines multiple cover types.

Risks of Working Without Public Liability Insurance *

Working without public liability insurance may expose subcontractors to significant risks, including:
– Out-of-Pocket Costs: You may be personally liable for compensation payments and legal fees.
– Loss of Business Opportunities: Many clients may refuse to hire subcontractors without proof of liability insurance.
– Financial Strain: A single incident resulting in property damage or injury may lead to serious financial consequences.

How to Get Public Liability Insurance *

At Public Liability Australia, we help subcontractors obtain competitive quotes and coverage options, offering guidance for your business activities. Contact us today for a quote and appropriate cover.