We get a lot of tradies, in particular handymen, contacting us about professional indemnity insurance.
The reason is often the same – a real estate agency they are doing work for requires that they provide evidence of such a policy.
First of all, it’s great to see that real estate agents see the importance of their tradies having insurance in place!
However this requirement for professional indemnity does cause some confusion.
Do handymen need professional indemnity?
Broadly speaking, a typical handyman will have no need for professional indemnity insurance.
Professional indemnity mainly caters to professionals who provide their advice in return for a fee.
Examples of these occupations would be accountants, financial advisers and consultants etc.
As a handyman you are providing labour rather than advice, and whilst your service may sometimes involve providing general advice, it is not something you would specifically be charging for.
Whilst we can’t sit here and say that no handyman will ever need professional indemnity, as a general rule, it is not a required form of handyman insurance.
So why do they ask for it?
So why are so many real estate agents asking their handymen and other tradies for evidence of this type of insurance?
We believe it is because many of them are using a generic form which lists insurance requirements for all types of service providers they deal with.
The list includes public liability insurance, which is absolutely vital for any self-employed tradie, but that is really the only relevant type of cover.
Generally we find that when a handyman goes back to the real estate agent with their public liability certificate, this is deemed to be sufficient.
What if I really want professional indemnity?
If you’re someone who likes to be ‘better safe than sorry’ and would still prefer to have professional indemnity in place, then of course we will still be happy to help you out.
In our experience most insurers will respond with something like “why is a handyman asking for professional indemnity?”, but we will still be able to arrange something for you.
Are you actually a building manager?
Where things can change is if you are not just a handyman, but more of a property or building manager.
A real life example we have seen is where a client took out insurance as a handyman, as that is the type of physical work he was undertaking.
However the client had actually signed a contract to be the building manager for an apartment complex.
Not only was he responsible for undertaking the physical maintenance work, but as the building manager he was also responsible for identifying any potential issues.
This certainly changes things, as now you’re not just responsible for performing work, but you’re also responsible for ensuring the building is maintained.
It may not sound like a big difference, but from an insurance perspective it is a huge difference.
Now you may be responsible not only for work you have done, but also for work that should have been done but wasn’t.
This is where professional indemnity insurance may become more relevant.
If this is the case we strongly recommend that you speak with our team to determine your proper classification and the appropriate insurance coverage.
Our recommendation
We can’t provide any type of recommendation without knowing your full circumstances, and even then, when it comes to a typical handyman we can’t really tell you whether you definitely should or should not have such a policy.
What we can tell you is that for someone providing handyman services and not charging for their advice, the need for professional indemnity is very limited.
If a real estate agency is asking you for the cover, just let them know that you have public liability insurance in place which covers your activities.
Please note that the information contained within this article is general in nature and does not take into account your personal circumstances. Because choosing to hold or not hold professional indemnity insurance you should speak with a qualified insurance professional.
If you’d like to discuss this issue in more detail please contact us.
