Here’s Why You Should Never Hire Uninsured Contractors

February 12, 2021
Small Business
The imar Difference

There’s always some risk involved in buying a real estate property, whether you’re an investor, builder or homebuyer. But one risk you should never take is hiring an uninsured contractor.

A lot of things can go wrong on a construction site. The workers are lugging around heavy equipment and operating power tools, increasing the chances of accidents and injuries. When the unthinkable happens, you want to have that cushion that can protect you from financial liabilities.

An insured contractor gives you this protection. Their insurance coverage keeps you from making out-of-pocket payments in case anything goes wrong on the site.

Risks of Hiring an Uninsured Contractor

When you hire an uninsured contractor, you may be financially liable in case of the following events:

Property Damage

Accidents are likely to happen even during small renovation projects. These could be as simple as cracking the tiles of your bathroom floor or installing faulty wiring that sets fire to a room in your house.

If your contractor is insured with a property damage policy, they’ll take care of the cost of the accident. But with an uninsured contractor, you might end up paying for the damage and repairs yourself.

It’s best to have your own property insurance policy. It will cover other hazards and property damage to your house. It may also protect you if an accident happens during construction, depending on the incident.

Injured Workers

Contractors should have insurance coverage in case they get into an accident and sustain an injury while on the job. If they don’t have a policy, you might be held liable since the incident happened on your property. You might end up paying for their medical expenses.

What Insurance Should a Contractor Have?

Before striking a deal with any contractor, it’s good practice to enquire about the insurance coverage they have. These are the insurance policies you want in a contractor:

Workers Compensation

Employers are required to provide workers compensation insurance in every state in Australia. This insurance provides payments to employees if they get sick or injured because of their work. Workers compensation covers the following:

  • Medical bills and rehabilitation expenses
  • Wages lost from the time of the injury until they return to work

Public Liability Insurance

Public liability is another insurance that contractors should have. It protects the business from any claims made against them by parties.

Public liability insurance covers the costs of damage to your property that resulted from the contractor’s negligence. If they cause an accident during the construction work that injured you or damaged any of the objects inside your house, the contractor’s insurance policy should also shoulder the cost.

Ultimately, choosing an insured contractor assures you that even if something bad happens during the construction project, you won’t have to suffer financially from the incident. Do yourself a favour and hire a reputable contractor who has all their insurance bases covered. You will save time, money and stress in the long run.

Business Liability Insurance for All Trades

At IMAR, we look after the specialist insurance needs of tradies, builders and small businesses. We provide insurance solutions for different industries, protecting contractors and workers from hazards unique to their profession.

At IMAR, we also offer other insurance policies to safeguard your business fully from potential losses, including tools and income protection.

Contact our experts today to know how you can safeguard your business and employees.

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