December 18, 2017
We’ve all read the puff pieces about public liability insurance online, how it’s indispensable for every tradie and they shouldn’t operate without it. And while that’s true, no one touches on what it doesn’t cover.
As always, we’ve gone the other way here at Go Get Insurance. So rather than spruiking a type of policy in an attempt to get you to buy our product (which coincidentally is great, by the way), let’s take a look at 3 things public liability insurances don’t commonly cover.
It’s important to remember that public liability insurances cover third party damages. This might be personal injury or property damage. But it’s not designed to cover rectifying a job that’s simply gone poorly. It will generally respond to resulting damage from a faulty job, but not the costs of fixing the job itself.
For example, a carpenter fixes a balustrade, and then it becomes dislodged and falls, damaging the wall and staircase below. Now the policy would generally respond to cover the damage to the wall and the stairs, but not the railing itself or reattaching it. That’s on you.
So it’s important to remember what this cover is designed for, and not to cut corners just because you have public and products liability insurance in place.
With that said, there are policies where faulty workmanship is covered for certain occupations where there’s an overlap in identification or a need for it; some motor trade occupations, for example. But this is the exception. Ensure you read your policy schedule in conjunction with your PDS to understand your coverage.
Professional Advice For A Separate Fee
Many tradies will give advice incidental to the job they’re charging for. A sparky might suggest a particular location for wiring, a landscaper a surface finish. This is fine if the advice is part and parcel of the actual job they’re doing.
It’s where charging a separate fee for this advice, in a consulting fashion, where tradies can come unstuck.
Consulting or charging for advice needs a product called Professional Indemnity Insurance. This covers financial loss from negligent advice where you charge a separate fee.
This point is particularly relevant to builders undertaking construction projects. Public liability will respond to third party accusations of damage or injury to their person or property, but what if something happens to the job you’re building?
Fire could burn it down, storm damage could ruin it. Thieves could bust in and strip it overnight, hooligans could vandalise it. Who’s responsible to fix it if you can’t find the culprit, or if there simply isn’t one?
Builders should consider a Contract Works Insurance policy, which has two sections: one covering public liability, and the other covering material damage, for this very reason.
If you’re unsure of your business requirements, have a chat about your public liability insurance online with us today.