Insurance Advisernet (FordSure) Newsletter

Managing risks- Key Insurance Covers Contractors Should Have Before Starting Work

There are 3 Insurance certificates that your Contractors should give you before starting work. 

Insurer requirement 

Your insurer will often have a requirement in your insurance policies that you obtain and keep copies of the contractors’ certificates of currency on file for use in the event of a claim. 

Quick Tips for checking Contractors’ insurance certificates 

  • Insured Name – It’s also worthwhile checking the name of the Insured on the insurance certificate. Sometimes, the wrong company is insured; 
  • Current Insurance – are the dates on the insurance certificate correct 
  • Enough cover – Is the sum insured on the certificate the same as the contract requires or more; 
  • Recognised insurer – is the insurer a well-known insurer. 

It is recommended that all your contractors provide proof of the following insurance before starting work: 

Workers Compensation Insurance – Workers compensation insurance is required where the contractor is a Pty Ltd or where the contractor has their own workers (sole trader with employee/s or workers. Note: the insurance covers the employees or workers, not the sole trader business owner. 

Personal Accident (PA) Insurance – is preferred for sole traders as sole-traders usually cannot buy workers’ compensation insurance. PA pays a weekly benefit following an accident or illness that prevents the person from working for a number of weeks. 

Public & Product Liability Insurance – which covers legal costs and any court-awarded damages against claims for personal injury to third parties, as well as damage to property owned or in control. 

Professional Indemnity Insurance (if applicable) – where a contractor provides advice or services such as an engineer or provides advice as part of their contract, such as a builder. This policy covers legal costs and any court-awarded damages against claims a client suffered a financial loss after following your advice. 

It is important that contractors have the appropriate insurance in place. It is not only a requirement of your insurance that you obtain the certificates of insurance, but it will also help protect your trusted contractors from financial disaster if they don’t have insurance. 

Talk to your insurance adviser or give Derek Ford at Insurance Advisernet a ring on 0414 540 767 

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