Almost all self-employed trades require public liability insurance, but electricians may require it the most.
For starters, in some Australian states, having an electrical contractors license is required.
Second, working as an electrician entails a great deal of risk, and working without insurance could be somewhat foolish. In this article, we describe public liability insurance and how it may be beneficial to you as an electrician.
What is the definition of public liability insurance?
Unlike many other types of insurance, which are focused on protecting your own property from loss or damage, public liability insurance is focused on covering you should your business cause losses to others.
As a result, if you cause property damage or bodily injury to another individual due to negligence, your public liability coverage will cover you.
You could say it’s there to protect people, but it’s also there to protect you because if you’re sued, it’ll save you hundreds, if not millions, of dollars in damages.
Here’s an example of a straightforward claim for an electrician. You or a member of your team is working on a garage lighting installation when your ladders fall and smash a window.
Although no one is hurt, the expense of restoring the window and the damage to the property can run into thousands of dollars. Do you wish to pay for it with your own money? No way!
Instead, if you had public liability insurance, the charges would be covered by your insurance.
Another crucial component of a public liability policy is what’s known as defence expenses.
Let’s say a house burns down, or someone is electrocuted, and someone points the finger at you because of some electrical work you performed.
Even if you are ultimately determined not to be at fault by the courts, your insurance will pay all of your legal expenses up to that point.
This is a crucial feature since, even if you believe your work is flawless and you never make a mistake, it won’t stop someone from suing you, and the cost of defending yourself might be crushing.
Why is public liability insurance necessary for electricians?
The most crucial reason is to protect yourself financially, although most electricians obtain insurance because it is required by their license.
Some states have particularly precise standards, such as the electrical contractor’s license in Queensland, which needs public liability coverage with a special “consumer protection” endorsement. In areas such as this, you will lose your license if you do not purchase the appropriate insurance.
Many construction projects also require all contractors and subcontractors to acquire public liability insurance before they enter the site.
Leaving license and contractual requirements aside, public liability insurance should be viewed as a necessary type of financial protection.
Even modest claims can go into the tens of thousands of dollars once legal fees are included, and no electrician wants to pay this out of pocket.
How much does public liability insurance set you back?
For a typical home electrician working as a sole trader (or one-person company) with a turnover of less than $100k, the annual premium for $5 million coverage is less than $500.
Given the level of coverage and the dangers you face, that’s an incredible bargain.
Because of the particular license requirements in Queensland, the cost is slightly higher, although a regular sparky will still cost less than $600.
The cost will be higher for businesses with larger turnover or personnel numbers, but not significantly so.
Research your public liability options today… you may thank yourself for it later.