The ongoing issues from Coronavirus / COVID-19 have tradies asking plenty of questions.
Insurance might not be at the top of the list, but we have started receiving questions from our clients.
Below we’ve put together a list of questions that tradies have asked us, or that we suspect they might start asking.
Please keep in mind that we are insurance brokers, and therefore deal with many different insurance companies and policy types. The information below is general and does not relate to a single specific product or policy.
- Does my insurance include “business interruption” cover?
- Are there any financial hardship provisions?
- Can I pause my public liability insurance?
- Can I cancel my public liability and restart it later?
- Does my public liability insurance cover pandemics?
- Does my income protection insurance cover pandemics?
- Does my personal accident insurance cover pandemics?
Does my insurance include “business interruption” cover?
Business interruption is a specific type of insurance that can cover your business for a period of time if you cannot operate the business.
Under usual circumstances, this might be if your premises were affected by fire or flood, and you couldn’t operate the business until repairs were completed.
For the vast majority of our tradie clients this isn’t an issue, and therefore they won’t hold this type of insurance.
It’s not included in any standard forms of insurance (such as public liability) so if you do have cover, it would generally be something you’d know about.
Whether or not business interruption insurance would respond to a claim involving COVID-19 is another matter.
We haven’t had any claims lodged at this point, but according to this article, most (if not all) business interruption policies will have an exclusion for pandemics or “quarantinable diseases”.
COVID-19 falls into both categories, meaning that there would be no cover in this instance.
Are there any financial hardship provisions?
The General Insurance Code of Practice does have a financial hardship section, however this relates only to cases where you owe a debt to an insurance company.
Financial hardship provisions do not apply to premiums for insurance.
That being said, as your broker we’ll always do our best to help with flexible payment terms.
What about Premium Funding?
If you’re paying your insurance monthly via a Premium Funding contract, there are no set financial hardship provisions, however they will work with you to get through this period.
If you are having difficulty keeping up your monthly insurance payments, please contact Premium Funding directly on 1800 005 110.
Can I pause my public liability insurance?
We can’t pause or suspend your public liability insurance. You can cancel it and take out another policy at a later date, however there are serious implications of doing this. See below…
Can I cancel my public liability and restart it later?
You certainly can, however many tradies (and even some insurance brokers) don’t understand how this can leave you exposed.
Many people think you need public liability insurance at the time of doing the work, but when it comes to a claim, the important part is having cover at the time of the incident.
This is known as an “occurrence-based” policy, which is the category public liability falls into.
Of course, many incidents resulting in a claim do occur at the time of doing the work, but other incidents can occur some time after the work has been completed.
An example could be a carpenter who builds a set of stairs. Everything seems fine with the stairs at the time, and both the carpenter and client are happy.
With the COVID-19 scare, the carpenter decides to down-tools for a couple of months, thinking there will be less work around. He’ll spend some time with his kids, do some work on his own home and live off his hard-earned savings for a few months.
He cancels his public liability insurance, knowing he won’t be undertaking any more work, and will take out a new policy once he does start working again.
That all sounds perfectly fine, right?
But during the months in-between, the stairs fail and the homeowner suffers a serious injury as a result of the failure.
The carpenter’s insurance would not cover him for the incident, as he didn’t hold public liability insurance at the time of the incident.
The fact that he held insurance at the time of undertaking the work is irrelevant.
That’s a huge risk for the sake of saving a couple of hundred dollars.
This is nothing to do with the quality of the policy or how good the insurance company or broker is. Public liability policies are occurrence-based, and they’ll only pay if you have cover at the time of the occurrence.
We have an article here which goes into more detail about this issue. It’s talking about cancelling your cover completely rather than cancelling for a short period, but it’s still relevant.
Does my public liability insurance cover pandemics?
We’ve looked through a few public liability insurance wordings and can’t find any exclusions for pandemics.
In saying that, we can’t think of a public liability insurance claim for a tradie that would involve a pandemic anyway, so it may not be relevant.
Does my income protection insurance cover pandemics?
At Trade Risk we don’t deal with income protection, but we have referred hundreds of clients to financial advisers over the years to assist.
There appears to be no exclusion for pandemics on most retail income protection policies, so the answer is probably yes, but you need to check your own policy or speak with your financial adviser.
As an example, MLC have produced this guide confirming that there are no exclusions on their policies for COVID-19.
They do make an important point though, that it must be the illness which leaves you unable to work. You will not be able to claim if it’s only self-isolation (and not the actual illness) stopping you from working.
Does my personal accident insurance cover pandemics?
We’re waiting on confirmation, but there doesn’t appear to be a specific exclusion for pandemics.
You’d also need to ensure you had an accident and sickness policy, and not just an accident policy.
All personal accident policies will have a waiting period, and this is the period you must be unable to work for before making a claim.
Amongst our tradie clients this is commonly 14 or 28 days, so for a typical COVID-19 illness you might be lucky to not reach the waiting period anyway.
In our opinion, it’d be much better to recover quickly and not have to claim, than to suffer a serious enough illness that you do have to claim.
But of course, insurance is there to be claimed on, so if you are unlucky enough to suffer more serious symptoms that keep you from working for longer, we will always lodge a claim for you.
Other questions
If you have any other questions about how your business insurance might respond to COVID-19 please contact us.
Our team are fully operation at this time and we’re here to help you.
Please keep in mind that like many of our clients, we are also a family-owned small business affected by the current social and economic issues.
