Electrician

One of the lesser common forms of insurance used by tradesmen is professional indemnity.

Professional indemnity insurance is generally associated with professionals who provide advice to their clients, but this doesn’t mean that certain trades businesses don’t need to consider it also.

What Is It?

Most tradesmen will be familiar with public liability insurance, and in some ways this is a similar form of cover.

Whilst public liability covers losses caused by your physical actions, professional indemnity covers losses caused by the advice you provide.

Who Needs It?

As a tradesman you should consider professional indemnity insurance if you have any clients who rely on your professional advice.

Generally speaking, in the building industry it is more likely to be architects and engineers who will need professional indemnity, rather than tradies and subbies.

Often the building or construction company engaging your services will stipulate the requirements in your contract, but just because it’s not in there doesn’t mean you couldn’t benefit from the cover.

A Tricky Area…

It is a tricky area, and it is difficult for us to provide general information on which tradespeople may need the cover.

Let’s say for example you’re a carpenter and you’re at a job replacing some rotten timber stair treads.

After you’ve replaced the obviously rotten treads, the client then asks you if any of the other treads require replacing. If you check them and say they’re fine, are you providing advice to the client?

If one of the treads you said was fine was to fail due to rot the following month, and someone was to injure themselves as a result, could you be found responsible for giving bad advice and end up financially liable for their medical expenses?

It could be argued that you were simply giving your opinion, and if the client wanted professional advice on the structural integrity of the stairs they should have engaged the services of an engineer, but who is going to hire an engineer to check their back stairs?

Trade Insurance

As we said, it can be a tricky area, and the best option is to seek advice from an insurance professional.

More Information

Most direct insurance companies are unable to give personal advice on which types of insurance you and your business need, and that’s why we recommend using a broker or adviser.

An insurance broker or adviser (such as those here at Trade Risk) will be able to assess your needs and make recommendations on whether or not you should consider professional indemnity.

For an obligation free chat please call our office on 1800 808 800 or complete our online quote form.

Advice Warning

Did we mention that professional indemnity insurance can be a tricky area? For that reason it is important that you don’t take any action based on this article without seeking advice from a qualified and licensed insurance professional.

This article contains general information only and does not take into account any of your personal needs and objectives. The article is intended to simply raise awareness of professional indemnity insurance amongst tradespeople.

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