A message from Shane Moore – Founder and Managing Director of Trade Risk.
I understand that right now is a pretty crazy time in the world, and you might have some reservations about renewing your business insurance.
The following text will take you about three minutes to read, but as a fellow business owner, I must stress the importance of reading it in full.
Whilst it might be tempting to not renew your insurance and take out a new policy after the downturn has passed, this will leave you exposed to claims that will not be paid.
Public liability insurance is an occurrence-based form of insurance. This means you must have cover at the time that an incident occurs, rather than at the time you did the work.
Example:
You’re a carpenter who recently built a new set of stairs. Everything seemed fine with the stairs at the time, and both you and the client were happy.
With the COVID-19 scare, you decide to down-tools for a couple of months, thinking there will be less work around. You’ll spend some time with your kids, do some work on your own home and live off your hard-earned savings for a few months.
You don’t renew your public liability insurance, knowing you won’t be undertaking any more work, and will take out a new policy once you do 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.
Your insurance would not cover you for the incident, as you didn’t hold public liability insurance at the time of the incident.
The fact that you 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. It’s just how public liability insurance works.
If you think it can’t happen to you, it absolutely can.
A real-life example was a flooring contractor client of Trade Risk.
As part of a flooring job in a commercial premises he installed a piece of aluminium trim, which a third party subsequently tripped backwards on whilst carrying equipment and suffered a serious injury.
This happened weeks after the job was completed, but could just as easily have been months later.
The initial claim against our client was $609,000. The insurance company’s legal team was able to bring the total claim down to $325,000, and argue that our client was only responsible for $95,000 of that amount.
His insurance covered the $95,000 that he was liable for, as well as all legal costs on top of that.
If our client had let his insurance expire in the meantime, his claim would have been declined. Without being able to afford the level of legal representation than an insurance company can, he may have been stuck with the full $609,000 bill, which would be enough to bankrupt most of us.
Even if he did pay for his own legal representation and was able to get the same $95,000 result, it would still be enough to ruin many tradies financially.
I absolutely understand that you need to save money during this time, but not renewing your public liability insurance could cost you thousands, if not hundreds of thousands of dollars in the event of a claim.
If I don’t bring this to your attention and stress the importance of it, I’m not doing my job of trying to protect tradies and their businesses, which is the reason Trade Risk exists.
If you have any questions, please speak with your account manager. They understand the current circumstances and will work with you to make sure you’re paying no more than you have to during this period.
Please call our office on 1800 808 800 or check the email your account manager would have sent to you within the last few weeks.
If you’re happy to take the risk and be uninsured for a period of time, please click the button below so that we don’t have to process your renewal.
Understand however that you are leaving yourself, your business and your family massively exposed by doing so.
Thanks for supporting Trade Risk. We’re here to support you when you need it.
Shane Moore
Founder & Managing Director
