Uncertain times can force us to consider the future, specifically how our own future may unfold.
If you’ve been thinking about what challenges tomorrow may bring for your business or trade, rest assured that you absolutely aren’t alone in these concerns at the moment.
During times of stress, we look to get as much support as we can in both our personal and professional lives, which could mean securing a safety net around our professional liability for the sake of some much-needed peace of mind. For many tradies, this means tradie insurance.
Choose the right cover
Getting the right cover for the right things without getting ripped off is a genuine worry that many tradespeople have before signing a policy. This is why we’ve put together a list of four criteria to help you choose the right cover* for your professional livelihood.
When first engaging with insurance companies, here’s what you should be looking to protect:
Injury and illness cover is perhaps the most common form of tradie insurance. Just like it says on the tin, it covers injury and illness that could keep you from working your usual hours and supports you financially throughout your recovery.
If you’re fit and healthy, some insurance companies offer a special (and usually more affordable) ‘injury only’ cover, which can be great for those just starting off in a trade. Be aware that not all injury and illness insurance options cover you outside of regular working hours.
This can include situations such as:
- Providing emergency repairs or services
- Out of hours house-calls to regular clients
- Helping family members or friends under your business name but while not actively trading
Make sure to ask your chosen provider about situations such as these before you sign a policy.
Overall, what makes injury and illness cover such a great form of tradie insurance is that it usually only requires a short waiting period of two weeks to a month before you become eligible to receive entitlements.
Just make sure to shop around, as most insurance providers who specialise in working with tradies will be competing strongly on this type of cover, which can help you get more value for a lower cost.
2. Your tools
Tool insurance is a type of cover that not a huge number of tradies outside of heavy industries think they need. After all, if you keep your tools and stock locked away and out of sight, why would you need this type of insurance?
Most modern tool insurance policies now cover losses in addition to theft, such as:
- Natural disasters
- Unintended damage by third parties
- Unforeseen circumstances (what exactly this means can vary so quiz your provider thoroughly)
Note: Many digital tools such as phones, laptops, GPS units and cameras are also regularly covered by tool insurance.
When looking for tool insurance, make sure that your chosen provider understands your trade fully and that the policy you end up with covers every part of your daily work.
3. Your business
When taking about tradie insurance, the policy that most insurance providers will call ‘essential’ is public liability insurance.
This covers you against a whole host of potential claims against you from a third party. When discussing business insurance, it’s best not to beat around the bush. Accidents happen and the last thing you want is to be left out in the cold without the proper coverage.
Whether it’s damage to property or harm to customers, suppliers, or contractors, you need to make sure that if the worst happens, you have the policy to safeguard your financial future.
A key concern to raise with your chosen insurance supplier is where exactly your public liability insurance covers you. Make sure that your tradie insurance extends to both your visiting of third parties on their property, as well as third parties visiting your premises or worksite.
Public liability insurance covers damage and injury to others. If you’re looking to also cover claims against your business due to potential financial loss by customers, we recommend doing some research into Professional Indemnity insurance as well (here’s a great resource we found that lays out the differences).
4. Your income
Distinguishing the difference between injury and illness cover and income insurance can often be difficult when reading dense and jargon-filled insurance policies. But to set the record straight, here’s the key difference:
Injury and Illness Cover
Support after illness or injury, which lasts until you recover (detailed above)
Long-term financial support until you can return to work, even post-recovery
When deciding whether you need income protection insurance, the risks involved with your trade are a huge consideration. If there’s a chance, even a small one, that you could be left with long term health impacts if something goes wrong at work, it’s worth thinking about income protection insurance.
So, what do you take away from all of this?
When engaging with insurance providers, you’ll probably be barraged with a number of policy options that all have fancy names and guarantees of what they cover. But before you sign anything, consider the numbered criteria we’ve laid out above and decide for yourself whether or not the policy you’re being offered protects one of these four key concerns.
As you can see from this article alone, there’s a lot to consider before signing up for a policy. Which is perhaps why so many tradies find it tempting to ‘set and forget’ their insurance policies. This can be risky as your circumstances will no doubt change over time.
Finding out that you’re under-insured or even over-insured is something you want to avoid. Our belief is that you should always shop around and maybe even check out specialised tradie insurers such as Trade Risk or imar Insurance to see if their offers suit you.
If you’re still unsure about what cover best fits your situation, have a chat with your accountant or financial advisor and discuss what’s going to be best for both you and your business.
*Disclaimer: This article is in no way intended to act as financial advice. For information on your individual circumstances and how they may affect the cover you need, we recommend speaking to an accredited accountant or insurance broker.
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