Does Builders Insurance Cover Different Trades I Have On-Site?

Building work can be complex and involve more than one trade. But does your builders insurance cover all of them?

It all depends on how you arranged your builders insurance policy. If you’re working with others, bona fide subcontractors will have their own insurance in place.

If you use labour only subcontractors, you will need to make sure your policy covers them in respect of public liability.

In this article, we’ll cover the following questions:

• Do my subcontractors need their own insurance?
• Does my insurance cover casual workers?
• What is employers’ liability insurance?

In order to get adequate protection, you’ll need to tell your insurance broker which employees are bona fide subcontractors and which are labour-only.

Do my subcontractors need their own insurance?

Yes. If you subcontract out part of a project, they will absolutely need their own insurance: public liability at a minimum. If they don’t and something goes wrong, you’ll have to pay for damages out of your own pocket.

From an insurance point of view, you may have three types of people working for you:

• Employees who work with you permanently or part-time
• ‘Labour-only’ subcontractors, who work under your supervision using your tools and materials
• ‘Bona fide’ subcontractors, who typically make their own decisions and use their own tools and materials

If you have any employees or labour-only subcontractors, you’re legally required to have employers’ liability insurance. This protects anyone who works for you against accidents, theft, and other workplace risks.

Does my insurance cover casual workers?

Yes, as long as you have employers’ liability insurance. In most cases, “casual workers” would be classed as “labour-only” subcontractors, who work under your supervision using your tools and materials.

No matter if your casual worker is with you for an hour, on and off throughout the year or just during the summer, you will need employers’ liability insurance to adequately protect them. However, if you are a sole trader and work alone, you may very well only have public liability insurance in place.

At the new business stage or renewal stage, you will be asked to project your turnover, your wages including payments to labour-only subcontractors, and if you will be using bona fide subcontractors.

If your employee or casual worker injures themselves on the job and you are proven negligent, your employee will be awarded compensation. This must come out of your own pocket, unless you have employers’ liability insurance.

What is employers’ liability insurance?

Employers’ liability insurance protects those who are working for you. If you have been hired to do a building project on a client’s house, and are looking for subcontractors to do some of the work, you are considered the main contractor. And as a builder or a tradesman employing subcontractors, you should make sure that all of you have the right builders’ insurance.

If your subcontractors don’t have their own insurance, it’s simple enough to get them added to your policy – but first of all, you need to put a name to your working relationship: employee, labour-only or bona fide.

If you have any employees or labour-only subcontractors, you’re legally required to have employers’ liability insurance. This protects anyone who works for you against accidents, theft, and other hazards and workplace risks.

You’ll need to give your insurer enough information to make sure they understand how the subcontractors fit into your project. Your insurer may not agree with your definition of labour-only or bona fide, but if you give us a call to work it out this is something we can help clarify.

We have builders insurance experts on hand to help you out when it comes to navigating builders’ insurance, so feel free to give us a call and we can help you find the right insurance for you.