Insurance tips for chippies
Posted on December 17th, 2014
No one likes having to cough up for insurance each year.
But if you work for yourself as a carpenter, you’d be crazy to risk everything by not having insurance.
All you can do is make sure that you’re getting the most competitive premiums available, as well as receiving good value on the money you’re spending.
With that in mind, we’ve put together a list of tips for chippies and their insurance.
Get the right cover
The first tip is simply to make sure you have the right types of cover in place.
There are plenty of different insurance types for carpenters, and there’s no point paying for cover that you don’t need.
For example if you took out public liability insurance as a subbie, but now you’re back on wages, you probably don’t need to be paying for that policy any more.
If you’re unsure about which policies you do and don’t need, the best option is to run through your situation with your broker and they will be able to provide you with some good advice.
Having the right cover can also save you money in the event of a claim.
Even if you can’t save any money on your upfront premiums, at least having the right cover will ensure that you are fully covered if or when you need to make a claim.
Keep your details up to date
Keeping your details current with your insurance provider isn’t just a good idea; it’s actually one of your obligations under the duty of disclosure which applies to all policies.
It can also potentially save you money.
For example if you were turning over $300,000 a year and using a couple of subbies when you first took out your policy, the cost would have been relatively high.
But if you’ve scaled back to working on your own without subbies, and now turning over $100,000 per year from your own carpentry work, you could be saving up to $1,000 a year on insurance.
The broker and insurance company have no idea unless you tell them though, so make sure you let them know of such changes so they can adjust your premium.
And remember, pricing changes don’t just happen at renewal time. If you change your policy part way through, you will get a pro-rata refund covering the remaining policy term!
As with the first point, keeping your details up to date can also save you at claim time.
For example if you try to make a claim for something which you hadn’t kept your insurer informed of, they may have to deny the claim.
But by keeping the insurer informed you will ensure that everything goes smoothly at claim time.
Choose your payment method
The way that you pay for your business insurance can affect how much you pay for it.
The two main options here are annually and monthly.
For example if carpenter A is paying annually and carpenter B is paying monthly, chippie B could be paying anything up to 15% more for his insurance.
This may not make a huge difference on small premiums, but if you have a larger insurance package this percentage can make a big difference.
I’ve saved possibly the best for last, which is to shop your insurance around.
Not all insurance companies charge the same premiums to carpenters.
For example one broker we found charges just $410 for $5 million public liability cover, whilst another charges a whopping $718!
Most of the brokers and insurers we looked at were around $400 – $500 for a basic policy to suit a sole trader carpenter with less than $100k turnover.
By shopping around you could potentially save hundreds on your carpenters insurance policies.
One final tip when shopping around is to make you’re still getting the right cover for your needs.
A $410 public liability policy may sound great, but if you’re doing extra types of work not covered by the standard policy, then you could be well out of pocket at claim time.
So by all means shop around and find the best deal, but make sure it still covers all of your carpentry (and potentially non-carpentry) business activities.
As always we believe that the best way to do this is by using an insurance broker who specialises in tradespeople, but the same principles apply even when going direct to the insurer.