A rising number of Australians are working as freelancers or contractors these days.
In fact, a 2014 survey by remote work site Elance-o-Desk suggests that around 30% of Aussie citizens complete some kind of freelance work.
Many of these would even choose to do it permanently if they could guarantee a steady stream of income, the surveyed said.
However, as full-time contractors and tradespeople know, there are certain pitfalls that come with not being tied to a company or an office – such as needing your own insurance for illnesses and emergencies, as well as cover for accidents that occur at the workplace or while working.
As the number of Australians freelancers spikes, it’s becoming more and more important for businesses and contractors to educate themselves on the types of coverage that are necessary for both parties.
These are the policies and products you should be keeping an eye out for if you're self-employed.
Contractor Business Insurance
Anyone who outsources their services to companies – or individuals – can opt to buy business insurance.
These policies protect you if any accidents that cause damage or injury arise while you are in the workplace.
This often includes coverage for:
- General property - protects the policy holder against any personal injury or property damage claims.
- Public and products liability - covers the individual in claims of irresponsibility that lead to the damage of property or personal harm.
- The fire and defined events product - means your business will receive a payout if it's damaged in natural catastrophes such as storms and earthquakes, as well as fires, explosions, and purposeful destruction. This often includes compensation if your office, buildings, contents, tools, and stock are destroyed and can also be applied to cover home offices.
- Personal accident and illness - this product is a fallback for if you are ever ill or in an accident and find it difficult to work as a result.
It’s crucial to note that there are several different business insurance policies available, occasionally from the same companies, targeted towards various industries and jobs.
Do your research to find the ideal policy for your freelancing needs.
What does contractors’ business insurance cover?
Contractors’ business insurance doesn’t just cover the self-employed individual who takes it out.
It also applies to the person or company you’re being commissioned by, as well as anyone else who could be affected by what kind of work you’re doing.
It can also pertain to accidental damage to buildings and tools, as well as any medical, legal, and compensation fees.
What doesn’t it cover?
As a rule, a contractors or tradespersons business insurance policy will not safeguard individuals who deliberately cause an issue or damage.
In addition, the insurer may refuse to allow you to take out the policy again if it seems your behaviour is in any way negligent.
Is it compulsory?
Not always, but it does make you seem a lot more reliable as a tradesperson, freelancer, sole trader, or contractor if you can reinforce your credentials with a business insurance policy.
If a company has to choose between an insured individual and someone who can’t provide them with that peace of mind, often they’ll go for the former rather than the latter.
Even when companies have their own insurance covering freelancers, it’s easier for them if the individual they are dealing with is also protected with a policy of their own choosing.
In addition, if you are hoping to deal with public agencies and on occasion, larger companies, you will often be required by law to obtain business insurance coverage – even if you’re working as an online freelancer.
With all the other expenses and financial insecurity that go with freelance and contract work, it’s easy to let taking insurance out sit on the back burner.
However it could cost you a great deal more not to have it, so look at some of the different options available.