Not only is workers compensation insurance an essential form of cover as it protects both employees and employers, it’s also compulsory in Australia. If you have employees working for you, you must legally have workers compensation insurance in place. But who is considered an employee? What about subcontractors? Today, we’ll be sharing what you need to know about subcontractors and workers compensation insurance.
What is workers compensation insurance?
Workers compensation insurance means that employees are covered financially following injury or illness which has occurred as a direct result of their job. Workers compensation insurance means that employers are reimbursed for payments made to employees following a successful workers compensation claim, such as ongoing wages, medical bills and rehabilitation costs. Each state or territory runs their scheme a little differently so check how your state operates.
Do you need to provide workers compensation insurance for subcontractors?
It’s important not to assume that subcontractors are responsible for their own workers compensation insurance. In certain circumstances, subcontractors need to be provided with workers compensation insurance through their employees. It all depends on whether a subcontractor is considered a ‘worker’ or not. The definition of a worker will vary between the different states and territories so you need to check the specific rules of where you live. If a contractor has their own business and operates independently, they may be considered a subcontractor and require their own cover. However, if a subcontractor is performing their work under the direct control of an employer and have a fixed hours and salary, they may be considered a worker. Remember, even if a subcontractor already has their own workers compensation insurance in place you may still need to provide coverage for them.
When do subcontractors need their own workers compensation insurance?
If a subcontractor workers for themselves and has no employees, they likely don’t require workers compensation insurance. However, there are some instances where cover is needed. For example, you could be subject to the terms of a contract which specify that you need to have workers compensation insurance in place. Many subcontractors also take out workers compensation insurance to provide ongoing financial peace of mind in case they become injured at work when carrying out a job for an employer.
Understanding the specific needs of tradies
At All Trades Cover, we understand the specific risks that tradies face every day on the job and we bring you insurance cover which gives you targeted cover. Our trade insurance package is designed for the needs of tradies so you can be confident that you’re receiving high quality cover at a competitive price. We provide competitive monthly payment options and you’ll also receive access to free legal advice.
To find out more about workers compensation insurance, contact All Trades Cover today on 1300 826 850 or fill in our easy online enquiry form.