Getting your business insurance sorted as a tradie is all about protecting yourself from risk.
But while many tradies get more popular types of cover for their small businesses such as Portable Equipment* insurance for their tools or Public Liability* to protect against third-party claims, there are some risks that many tradies don’t consider before it’s too late.
If you’re an electrician, plumber or carpenter who runs your own business, you probably know your stuff when it comes to your trade. And sometimes, your client’s may seek out your expertise on certain things and you offer your tradie pearls of wisdom while on the job. But did you know that if your advice causes them a financial loss you could be held responsible? That’s where Professional Indemnity* insurance could come in handy.
How does Professional Indemnity insurance help tradies?
You’re a professional and there’s no doubt you’ll back your knowledge and skill in when a situation arises. However, mistakes happen to the best of us and it’s good to consider being prepared for when they do.
Professional Indemnity claims can arise from a variety of situations. You could give the wrong service, miscalculate a measurement, or give an incorrect diagnosis or treatment and your client could suffer financially as a result.
Professional Indemnity claims can also occur from you not doing something, such as failing to meet a deadline, your client’s expectations, or even losing important documentation.
If you are being paid for your advice, your words hold weight. People trust your opinion when you give specialist recommendations, and this could have severe repercussions if you are wrong. This is why inadvertently defaming someone or engaging in misleading or deceptive conduct could also result in a claim made against you.
While you may not think it’ll happen, each of these situations pose a risk to your business. Luckily, Professional Indemnity insurance is designed to protect you from these risks so you can get back to doing what you do best.
What’s the difference between Professional Indemnity insurance and Public Liability insurance?
More than 10,000 plumbers, electricians, and carpenters currently sort out their business insurance through BizCover – many of which take out Public Liability insurance.
And for good reason. Not only does Public Liability protect you from third-party claims resulting in personal injury or damage caused to their property caused by your business activities, but it’s often mandatory for these occupations, depending on what jurisdiction you’re in.
Yet only a fraction takes up Professional Indemnity insurance. While it may not be mandatory, the results of a claim against you because of your advice could be disastrous for your business.
Take this electrical consultant for example**, who was set to provide design advice and calculations about a building structure and its proximity to nearby powerlines. Unfortunately, the design didn’t allegedly comply with the national standards and as a result, construction work had to be stopped midway and demolished.
The claimant had claimed for significant re-design and rectification works and a settlement sum of $250,000 had been issued. Luckily for the tradie, the business had Professional Indemnity cover in place.
Recommended reading: Public Liability vs Professional Indemnity insurance: What’s the Difference?
What can you do?
The above example is of a real Australian business that knows first-hand about the importance of Professional Indemnity cover. While the risk may be unlikely, these things do happen to Australian businesses like yours. So, if you’re getting paid for your professional advice or opinion then it’s important to consider whether you are covering yourself.
Running a tradie business can be stressful at the best of times, let alone when you have a claim made against you because of your advice. Fortunately, you can get protected for Professional Indemnity insurance today through BizCover.
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**The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Cover for a claim will depend on the specific circumstances around the loss and would be subject to the terms and conditions of the policy concerned. Coverage for claims on the policy will be determined by the insurer, not BizCover, and will depend on the specific facts and circumstances involved.