As a subbie there are two main forms of insurance that you really need to know about.
These two forms of insurance are known as public liability and income protection, and in this guide we’ll take a look at them both from a subbie’s perspective.
As a subcontractor you will (in most cases) not be covered by anyone else’s insurance including the builder or head contractor etc.
This means that you need to have your own public liability insurance in place to ensure you are properly protected in the event that you cause property damage or personal injury to another person.
Depending on your trade, public liability cover for a subbie is generally very affordable, with premiums starting at around $450 per year for a standard trade such as a carpenter.
As a subbie you are technically self-employed, which means no sick leave and in most cases no worker’s compensation.
This leaves you very exposed if you couldn’t work for a period of time due to illness or injury, and is why income protection is so important for subcontractors.
An income protection policy will cover up to seventy-five per cent of your normal income if you are unable to work for a period of time due to sickness or accident.
Getting a tax deduction is always good when you’re a subbie, and the good news is that both public liability and income protection are fully tax deductible for subcontractors.
Of course you should speak with your accountant for specific tax advice, but generally subbies will be able to claim a full deduction on these two forms of cover.
Do I Really Need Insurance?
If you were an employee with sick leave, workers compensation and full coverage under your employer’s public liability, then the answer would probably be no.
But you’re not an employee, you’re a subbie, and that means that you’re on your own when it comes to insurance.
You might be able to get away without having any, but if something goes wrong on the worksite you could find yourself and your family in some serious financial trouble.