No one wants to spend more than they have to on insurance, so doing a trade insurance comparison can be a great idea.
But it’s not as simple as comparing prices and choosing the cheapest. Not all insurance policies are equal, and not all insurance brokers are equal.
The trick is to find the policy with the most competitive premium, that you know is going to meet your needs and not fail at claim time.
In this guide we’ll look at some of the key factors you should be considering when comparing trade insurance quotes.
Public Liability
We’ll kick off with public liability, as it is the the most common form of trade insurance.
Most public liability policies are extremely similar in terms of the basic coverage. Where it can get more interesting is the additional covers included, and how the policy works for your specific trade.
Additional Covers
There are a few different types of additional cover that you’ll typically find with public liability insurance.
Some insurers will offer them as standard, some will offer them as an extra-cost option, and some simply won’t offer them at all. The main two
Tax Audit
Tax audit is the most commonly included option you’ll find with public liability. It will have various names such as tax audit, tax dispute, etc.
This option covers the accounting costs involved with an audit by the ATO. If you’re found to have underpaid tax it won’t cover the underpayment, and typically won’t pay any penalties. It’s just about covering your costs in dealing with audit.
Exactly what is covered will vary from one policy to the next, so if you are undertaking a trade insurance comparison and are interested in tax audit cover, ask your broker for more information.
Faulty Workmanship
There are two aspects to faulty workmanship – first of all there is the property damage or person injury that may occur as a result of your faulty workmanship, and secondly there is the cost of rectifying the work.
The first aspect, which is property damage or personal injury as a result of faulty workmanship, is generally covered under any public liability insurance policy. It’s still worth asking your broker or insurer if you’re concerned, because it’s not 100% with all insurers.
The second aspect, which is the rectification of your faulty work, is typically not covered by a public liability policy, nor is it offered as an option.
At Trade Risk we are able to offer this option for our online policies. For a small extra premium you can add $25,000 or $50,000 cover for rectification work. For an extra $35-$70 per year it’s a great value option, and one that is unique to this policy.
Cover for Subcontractors
The different insurers and underwriters will treat the use of subcontractors by trade businesses slightly differently.
What they have in common is that they all see the use of subcontractors as a slightly higher risk, and may charge a higher premium or apply different conditions.
Virtually no insurers will actually cover your subbies under your public liability, but they still need to know about their usage.
Some insurers will charge a slightly higher premium based on the percentage of your turnover that is paid to subcontractors. If it is a small percentage there may be no increase, if it is a large percentage it may be a higher increase.
Once you reach a certain percentage of turnover paid to subbies, some insurers won’t offer cover at all. This is because they simply see it as too much of a risk.
Some insurers will specify that you must ensure any subcontractor you use has their own insurance in place (which you’d check via their certificate of currency) and some stipulate that your subbies must even have the same level of cover. i.e. if you have $20m cover, the subbies must have that too.
Getting any of this wrong could cause major issues if a claim arises that involves both you and your subcontractors, so when comparing trade insurance quotes for public liability, make sure you take a good look at the conditions around subcontractor use.
Worker to Worker Excess
The meaning of a ‘worker to worker’ claim can vary from one insurer or underwriter to the next, which makes it a very complex area to get into.
Essentially, it is referring to a claim for personal injury where you or one of your workers has caused an injury to another worker on site.
Some insurers exclude this cover completely, some treat it just like any normal claim (meaning it is covered) and some cover it whilst applying a higher excess.
So if you’re comparing three different trade insurance quotes, one of them might offer no cover for this type of claim, one might offer full cover with a standard excess, and the other might offer cover with an excess of anywhere from $5,000 to $25,000.
This can have pretty serious consequences in the event of a claim, which is just another reason why it’s important to compare the different policies properly, rather than just looking at the price and choosing the cheapest.
If you have questions around worker to worker coverage, we strongly recommend you speak with one of our insurance brokers.
Trade or Occupation Specific Issues
Another important aspect when comparing public liability policies is how your specific trade, occupation or business type is treated.
Not all policies cover all trades and occupations in the same way. For example some policies limit painters to external works of up to 10m, some up to 15m and some don’t have a height limit at all.
If you are undertaking external painting at heights of greater than 10m or 15m, you need to ensure you have the policy that’s going to cover you.
There are many other similar differences across the different trades, and across the different insurers and underwriters.
You could find yourself comparing two different policies, thinking they are both the same, but they might actually cover your trade in very different ways that could have a massive impact in the event of a claim.
Picture this… You have a six-figure claim declined because you chose a slightly cheaper policy without knowing the real differences, and if you’d have taken the policy that was $50 more expensive you would have been fully covered. That is a real possibility.
Income Protection Insurance
If you thought public liability had a few differences, income protection can be even more complex!
We don’t want to scare you with all of this, but we really want to ensure our clients (or potential clients) understand that you need to look at much more than just price.
When comparing trade insurance quotes for income protection, you need to know there is real income protection and there is what some people just call income protection.
The real deal is only available through a licensed financial adviser, which is how we do things here at Trade Risk. The process for obtaining genuine income protection is a little more time consuming, but it is a far superior form of cover.
What some brokers call income protection insurance should really be referred to as ‘accident and illness’ or similar. This cover is generally much faster to setup and might seem more straightforward, but is a far less superior form of cover.
If you want to know more about the differences, call our team on 1800 808 800 and we’ll be happy to run through it with you.
In our opinion, comparing quotes for income protection (or its inferior competitors) is not something to take lightly, as the differences can be quite complex and have a huge impact on your ability to make a claim. Our team can do the comparisons for you and explain the real differences in cover and of course the prices.
Other Insurance Types
Just like car and home insurance, there are plenty of large and small differences in the trade insurance policies offered by the different insurers and brokers.
There’s no reason why any tradie couldn’t do a decent comparison and analysis on the different policies and quotes received, but to do it properly, we’d expect it to take many hours of research.
On top of that, there are some situations that only a broker will know about thanks to their experience. Issues that might not be obvious in the policy documents, but they just know from experience in dealing with thousands of clients and dozens – if not hundreds – of claims.
It’s a bit like a non-tradie undertaking some DIY work. With enough research, the right tools and dedication to learning the job they could probably do a lot of work themselves, but it’s never going to be up to the same quality as a qualified and experienced tradesman.
Service
We’ve saved the very best for last – service.
It’s a sad fact that many people overlook service in the quest for the lowest price. It’s been really ingrained in us that we should compare the price of everything and haggle for the best deal. If someone can save you $5, you switch to them.
Sure we all want to save money and get the best value, but keep in mind this famous old saying:
“The bitterness of poor quality remains long after the sweetness of low price is forgotten.”
Whilst comparing trade insurance quotes you might find that a call-centre type of operation has a slightly lower premium, but is that really who you want to be dealing with on a long term basis? Especially when things get complex, which they easily can.
Dealing with a professional brokerage on the other hand (such as Trade Risk) means you are dealing with the same dedicated expert from when you first setup your policies to when you need to make a claim.
Here at Trade Risk we have received multiple accolades for ours service, and just this year (2018) we were awarded Best Customer Service at the Insurance Business Awards.
So if your trade insurance comparison has come down to two providers, one of which is slightly more expensive, do you choose the proven award-winners, or do you save a few bucks a month and hope for the best?
We know which we’d choose of course, but it’s up to you how seriously you want to take your business. We believe if you take your business seriously, you should also take your business insurance seriously.
If you’re ready to compare quotes with Trade Risk, choose from the insurance options below or call us on 1800 808 800.
If you’re unsure of what you need, or just want assistance with a trade insurance comparison, call our team on 1800 808 800 or contact us online.
