Risk is an unfortunate part of doing business in most, if not all, industries. Tradies, in particular, put themselves, other people, and their property at unfathomable risk every day. From handling potentially hazardous materials to faulty craftsmanship, lifting heavy objects, dangerous work conditions, risky tools, and many more variables that could threaten their livelihoods, tradies put everything on the line for the sake of their client’s satisfaction.
However, that does not mean tradies should bear the consequences of their work’s inherent risks when an accident occurs. Enter public liability insurance. Although being cautious and adhering to occupational safety standards can consistently keep tradies out of trouble, getting public liability insurance is perhaps the only way they can remain in the clear when something goes wrong. But what exactly is public liability insurance, and why does every tradesperson need it?
Public Liability Insurance
Whenever a business poses a threat to the public, the law allows the affected members of the public to hold the business responsible up to the extent of the threat in question. Public liability insurance is a cover that protects insured persons or organizations against their liability to the public/third parties arising in the course of their usual business.
So many things could go wrong during a tradesperson’s work: unanticipated rain, earthquakes, gusts of wind, faulty equipment, and human error might compromise their work and harm other people or their property in the process. Public liability for tradies covers the costs for property loss or damage, personal injuries, and deaths that may occur in the line of duty.
Note that public liability insurance may not cover:
- Illegal activity
- Damage to property owned by the tradesperson
Why Do Tradies Need Personal Liability Insurance?
1. To Mitigate Risks
Regardless of the industry, risk management is an essential element of any successful business. Given all the tools, heavy machinery, and occupational hazards handled by a tradesperson every day, implementing risk prevention and management techniques becomes a necessity rather than a choice.
Public liability insurance is among the most effective yet relatively inexpensive ways for tradies to manage workplace risks and hedge themselves against the unexpected. With public liability insurance, tradespersons can stay rest assured that their careers, employees, equipment, and the public will be adequately protected should an accident or emergency occur.
2. Adherence to Worksite Requirements
Although regulations and worksite requirements vary by occupation and location, public liability insurance is among the prerequisites for performing construction-related work. Most medium and large sites – and smaller sites more recently – require tradespersons to provide evidence of public liability insurance before they begin work. The strictest of sites do not allow tradies to set foot on their premises without the requisite cover.
Occupations with licensing requirements, like plumbing, also require registered professionals to have public liability covers to practice. When applying for a license or performing an annual renewal, tradies had to show evidence of insurance before receiving their licenses.
3. To Cover Compensation Payments and Legal Costs
The costs of a workplace accident, whether intentional or not, can be astronomical. Damage to workplace property and public property damage and cost anything from a few dollars to several millions of dollars. Failing to seek protection via public liability insurance would force a tradesperson to cover any damages following a workplace accident out of pocket, even if they were not involved directly.
4. Protection Against Third-Party Injuries
For tradies, getting public liability insurance is not only about protecting themselves and their employees in the line of duty; it is also about protecting members of the public against injuries. Tradespersons are often held responsible for injuries resulting from the work they or their employees did.
For instance, if an electrician installed faulty cabling and their client got electrocuted a few days later, they would have to cover the client’s medical expenses. Public liability insurance protects tradies against such incidences.
5. Business Reputation
Building a solid business reputation takes years and a lot of effort. While most people do not take out insurance hoping to protect their company’s reputation, it might come in handy when a potentially brand-tarnishing accident occurs. Taking out public liability insurance shows that a tradesperson values their occupation and is willing to pay to protect their clients’ well-being.
Handling charges without the right insurance has forced many small companies out of business. Choose to be different. Get your public liability cover from a reputable provider to protect your business and clients.