When it comes to insurance, there are a few forms of cover for tradies which are highly recommended (we’re looking at you, public liability insurance) but they don’t tend to be compulsory. However, the exception is workers compensation insurance which is compulsory in Australia if you have employees. But why is this form of cover so essential? Let’s take a closer look at why workers compensation insurance is so important for tradies.
What is workers compensation insurance?
As we’ve discussed, workers compensation insurance is compulsory cover for employers who hire employees as part of their business. If an employee suffers from a work-related injury or illness, workers compensation insurance can help pay for expenses such as ongoing wages, medical bills and rehabilitation costs. Employees may also be eligible for a lump sum payment in the event of a permanent impairment.
How does workers compensation insurance work?
Workers compensation insurance schemes will differ depending on the state or territory that you live. In Queensland, the scheme is run solely through the government. In South Australia, NSW and Victoria, insurers operate on behalf of the government, while in Western Australia, Tasmania, Northern Territory and the ACT, the scheme is run privately through insurers.
Do subcontractors need workers compensation insurance?
If subcontractors work for themselves without employees, they generally won’t need workers compensation insurance. However, there may be some circumstances, such as contract conditions, where this cover is necessary. Employers also need to be careful not to assume that subcontractors don’t need to be covered under the employers policy – there are certain situations where a subcontractor is deemed a ‘worker’ and therefore requires cover. Ask your insurance broker for more specialised advice around your specific situation.
How much does workers compensation insurance cost?
When considering the premiums of your workers compensation insurance, the insurer will consider factors such as the number of employees you have, the type of work you do and any prior workers compensation claims. As part of the process, you’ll be required to provide a wages declaration as your premiums rate is calculated according to the wages you pay your employees and the calculated rate of your industry.
What does workers compensation insurance cover?
Workers compensation insurance covers a number of situations, the most common one being lost wages which allows an employee to keep up with expenses. It will also cover medical bills associated with the injury or illness attached to the claim and associated ongoing expenses such as physical therapy or specialist equipment.
At All Trades Cover, we understand that tradies work hard and we want your insurance to work just as hard as you do. We provide easy to understand, hassle-free insurance thanks to our convenient trade insurance package. We’re partnered with the world’s largest insurance and reinsurance marketplace which means we can provide quality insurance cover at a competitive price.
To learn more about workers compensation insurance for your business, contact All Trades Cover today on 1300 826 850.