A Guide to Tradie Insurance: What Does Public Liability Cover?

A Guide to Tradie Insurance: What Does Public Liability Cover?

When you hire a tradie, you're not just paying for their skills and time—you're also paying for their insurance coverage. Public liability insurance is one of the most important protections for both tradies and homeowners, yet many people don't fully understand what it covers or why it matters.

This guide will explain public liability insurance in simple terms, helping you understand what protection you have when tradies work on your property.

What is Public Liability Insurance?

Public liability insurance protects tradies (and their clients) from financial loss if someone is injured or property is damaged as a result of the tradie's work. It's designed to cover the costs of legal claims, medical expenses, and property damage that might occur during or after a project.

Key Components of Public Liability Insurance

Bodily Injury Coverage: Protects against claims if someone is injured due to the tradie's work Property Damage Coverage: Covers damage to your property or neighbouring properties Legal Costs: Pays for legal fees and court costs if a claim goes to court Settlement Costs: Covers out-of-court settlements and compensation payments

What Does Public Liability Insurance Cover?

1. Accidental Property Damage

Examples:

• A tradie accidentally breaks a window while working
• Electrical work causes damage to your home's wiring
• Plumbing work results in water damage to your floors or walls
• Construction work damages your neighbour's fence or garden

Coverage: The insurance pays for repairs or replacement of damaged property

2. Personal Injury Claims

Examples:

• A tradie's equipment injures a family member or visitor
• Someone trips over tools or materials left on your property
• A tradie's work creates a hazard that causes injury
• Falling debris from construction work injures someone

Coverage: Medical expenses, lost wages, and compensation for pain and suffering

3. Third-Party Claims

Examples:

• Damage to neighbouring properties
• Injury to passersby or neighbours
• Damage to shared facilities (like apartment building common areas)
• Claims from utility companies if their infrastructure is damaged

Coverage: Legal costs and compensation for third-party claims

4. Product Liability

Examples:

• Materials or products installed by the tradie cause damage later
• Defective workmanship leads to property damage
• Improper installation causes ongoing problems

Coverage: Costs associated with defective work or materials

What Public Liability Insurance Does NOT Cover

1. Poor Workmanship

Not Covered:

• Work that doesn't meet industry standards
• Jobs that need to be redone due to poor quality
• Defects in workmanship that don't cause injury or damage

Why: Insurance covers accidents and damage, not poor quality work

2. Intentional Damage

Not Covered:

• Deliberate damage to property
• Criminal acts or vandalism
• Damage caused by negligence or recklessness

Why: Insurance doesn't cover intentional or criminal acts

3. Business Interruption

Not Covered:

• Loss of income if you can't use your home
• Additional living expenses during repairs
• Loss of rental income

Why: This requires separate business interruption insurance

4. Pre-Existing Conditions

Not Covered:

• Damage that existed before the tradie started work
• Problems that were already present
• Wear and tear that's unrelated to the work

Why: Insurance only covers new damage caused by the tradie's work

How Much Coverage Do Tradies Need?

Minimum Coverage Levels

Small Jobs: $1 million minimum Medium Projects: $2-5 million recommended Large Renovations: $5-10 million or more Commercial Work: $10 million or higher

Factors That Affect Coverage Needs

• Type of work: Electrical and plumbing work typically requires higher coverage
• Project size: Larger projects have higher risk exposure
• Location: Urban areas with higher property values need more coverage
• Client requirements: Some clients require specific coverage levels

How to Verify Your Tradie's Insurance

1. Ask for a Certificate of Currency

This document shows:

• Current coverage amounts
• Policy expiry date
• Types of coverage included
• Insurance company details

2. Check the Details

Verify:

• Coverage amount is adequate for your project
• Policy is current and not expired
• Coverage type matches the work being done
• Insurance company is reputable and licensed

3. Contact the Insurance Company

You can call the insurance company directly to verify:

• The policy is active
• Coverage details are accurate
• The tradie is listed as the policyholder

What Happens If Your Tradie Doesn't Have Insurance?

Risks for Homeowners

Financial Liability: You could be responsible for damages and injuries Legal Costs: You might need to hire lawyers to defend against claims Property Damage: You'll pay out of pocket for repairs Insurance Claims: Your home insurance might not cover tradie-related damage

Warning Signs

• Tradie can't provide a certificate of currency
• Offers to work "under the table" without insurance
• Claims insurance is "too expensive" or "not necessary"
• Asks you to sign waivers releasing them from liability

Additional Insurance Considerations

1. Workers' Compensation

What it covers: Injuries to the tradie or their employees while working Why it matters: Protects you from liability if workers are injured on your property

2. Professional Indemnity

What it covers: Claims related to professional advice or design work Why it matters: Important for tradies who provide design or consulting services

3. Product Liability

What it covers: Damage caused by products or materials used Why it matters: Protects against claims related to defective materials

Questions to Ask Your Tradie About Insurance

1. "Can you provide a current certificate of currency?"
2. "What's your coverage amount, and is it adequate for this project?"
3. "Do you have workers' compensation insurance?"
4. "What types of claims are covered under your policy?"
5. "How do you handle claims if something goes wrong?"

The Bottom Line

Public liability insurance is essential protection for both tradies and homeowners. It provides peace of mind and financial protection against accidents, injuries, and property damage that can occur during home improvement projects.

As a homeowner, you should always verify that your tradie has adequate insurance coverage before work begins. Don't be afraid to ask for proof of insurance—professional tradies will be happy to provide this information.

Remember: Insurance is not just about protecting the tradie; it's about protecting you, your property, and your financial security. Never hire a tradie without proper insurance coverage, no matter how good their price or reputation might be.

Ready to hire a tradie? Make sure you know the 10 Questions You Must Ask Before Hiring a Tradie and understand How to Find a Reliable and Licensed Tradie to ensure you're working with properly insured professionals.