Common Chippies Insurance Questions – Trade Risk
Some of the most common questions we get at CAHQ from our members are about insurance, so we thought we’d put a few of them over to the experts. Trade Risk, Carpentry Australia’s recommended insurer, insure around one thousand carpenters from around Australia, so it’s safe to say they know a thing or two when it comes to your insurance. Article from www.traderisk.com.au.
Please keep in mind that these answers are fairly general in nature, and if you have specific questions about your own circumstances you should get in touch with us.
I subcontract mainly to just one builder. Will I be covered under their insurance?
If you’re working under an ABN then you’re going to need your own public liability insurance, regardless of how many builders you subbie to.
When you’re doing the vast majority of your work for a single builder it can feel like you’re an employee, but if you’re using your own ABN, you’re on your own when it comes to public liability.
The same goes for workers compensation. You might do all your work for one builder, but if you’re a subbie you might not be covered under their workers comp.
In this case you’d need your own income protection insurance to ensure you’re looked after if you’re unable to work due to injury or illness.
There is an argument that if you are working for just one builder you should be classed as being on wages, in which case you would be covered by their public liability and workers compensation.
This is more of an issue for the Australian Taxation Office rather than your insurer however, and if you have any concerns about how you services are being engaged you should take it up with the builder.
At the end of the day, if the builder is to paying you as a subbie rather than as an employee then you should have your own insurance in place.
I’m a carpenter doing my own building jobs. Should I be insured as a carpenter or a builder?
This is a major one we come up against almost every week.
We get some people seeking insurance as a carpenter who should really be insured as a builder, and some seeking insurance as a builder who should really be insured as a carpenter!
So what’s the difference when it comes to insurance? Well it all comes down to who is running the job as the licensed builder.
Your trade might be a carpenter, but if you also hold a building licence and are undertaking sizable renovations and extensions, then you should probably be insured as a builder rather than a chippie.
This is especially true if you are subcontracting out all of the associated work such as the plumbing and electrical. In this case you should definitely be insuring as a builder.
On the flip side if you are doing similar work, but as a subcontract to a builder, then you only need to insure yourself as a carpenter.
Obtaining insurance as a carpenter is cheaper than a builder, however if you are classed as a builder, then that’s what you need to insure yourself as.
If you’re unsure the best bet is to speak with our trade insurance experts here at Trade Risk who can help determine how you should be properly insured.
How much public liability does a carpenter need?
This is a questions that plenty of chippies ask, but isn’t so easy to give a definitive answer to.
The minimum amount of cover available is $5 million and the maximum is $20 million.
What will often dictate how much cover you need is where you are working and who you are doing the work for.
For example if you are working in shopping centres, you’ll find that $20 million is the amount of cover required.
On other building sites the amount is sometimes $10 million, and commonly there is no minimum requirement, which just leaves $5 million.
If no one has asked you for a minimum amount of public liability, then you’re free to choose whatever you want.
In reality most carpenters are extremely unlikely to ever make a claim even close to $5 million, but given that the price increase to $10 million cover is minimal, having twice the cover may be worthwhile.
I’ve heard that tool insurance is expensive and never pays out. Is this true?
We really don’t know how tool insurance picked up its bad reputation, but there is a feeling out there that it can be expensive and is too restrictive to ever claim on.
This couldn’t be further from the truth. Here at Trade Risk we get successful payouts for our clients every single week.
As long as there is evidence that forced entry was used to access your gear, you have a police report and you can provide evidence of ownership (eg. receipts) then you shouldn’t have any problem claiming.
We very rarely have a genuine claim for tools that we cannot get paid by the insurer.
As for the cost, you’re looking at less than $300 per year for $5,000 cover.
If you have any other questions relating to carpenters insurance, please get in touch with us.
Our team are experts on insurance for chippies, and you can call them for a chat anytime during business hours on 1800 808 800. You can find more handy articles and insurance information by heading to www.traderisk.com.au