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Reducing risk for tradies
From copper thieves to flammable dust, worksites pose serious risks for tradies' businesses. Theo Pitsikas, Leader of Business Insurance at AAMI, explains how to protect your interests.
As a tradie, there are many risks that have the potential to put you out of business – sometimes for good. Some of these risks are fairly obvious. One of the biggest is that someone will be injured or even killed as a result of your work environment or because of the incorrect use of equipment.
Electricians face the very serious risk that they, a member of the public or one of their workers, could be electrocuted due to their workmanship. Likewise, carpenters are of course responsible for the integrity of structures they construct. A collapsing roof or floor in a house can have deadly consequences. You can also be accountable if somebody’s property is damaged as a result of work you've undertaken, or products you've installed. For example, faulty electrical work in a house can potentially ignite and engulf the property in fire and then spread to nearby houses. Electricians can be liable for the damage to the neighbours' properties as well as their actual customer’s property.
Plumbers can get themselves into strife if their customers' homes become water damaged due to substandard pipes or incorrect fittings, leaking or faulty workmanship. Being responsible for serious injuries or property damage can be both extremely costly and severely detrimental to your business' reputation. As well as this, it could have a devastating personal impact on you.
Thankfully, most tradies are all too aware of these risks and take the proper precautions, including covering their business with public and products liability. However, there are many other less obvious risks that should not be overlooked. Some of these risks include:
- Dust build-up: This often occurs during construction and carpentry work. Dust exposure can cause members of the public to become unwell, such as causing asthma attacks and other respiratory conditions. Dust is also flammable, so it can pose a fire risk.
- Soldering and welding: These are undertaken by a wide variety of trades. Sparks from these tools can easily start a fire if they're used in uncontrolled conditions.
- Flammable building materials: Materials, such as wood, pose a fire risk if they're not kept in safe locations.
- Dangerous tools: Certain tools, such as power saws, drills and nail guns, can pose a threat to members of the public if they are used improperly or left unsupervised.
- Copper theft: This is a particular problem for plumbers and electricians. Copper wiring and plumbing is expensive and may be a tempting target for thieves, particularly if they're left unsecured or in the back of your vehicle.
- Damaged infrastructure: Any tradies who are involved in excavations, construction or renovations, can easily damage a house's water or gas plumbing, or electrical and communication wiring if they are not careful in the process of their work. This could cause water damage, fires or power outages. The risks include the use of lower-quality materials, failure to follow specifications, building codes or safety precaution standards, and defective work.
To cover your business against these situations, it's imperative you have public and products liability insurance and portable and valuable property insurance. Public and products liability covers your legal liability for injury or damage that you, your employees or your business causes to other people or their property. Fortunately, most tradies are required to take out this cover when they take up a contract. In cases such as these, it's important to remember you are responsible for any product you use in the course of your work, even if you don’t manufacture it. This includes fittings and wiring, building materials and tools.
You should also take proper precautions to mitigate these risks. Ensure you and your staff are well trained and certified to perform the work and use the tools and equipment. If doing underground work, it's important to use the 'dial before you dig service'. If undertaking hot work, such as grinding or welding, ensure you comply with the relevant Australian safety standards.
It's also very important to perform all the correct safety checks and use materials, products and tools with the right quality standards. Ensure your tools and equipment are secured or supervised when not in use so they cannot harm a member of the public.
Meanwhile, portable and valuable property (also known as general property) covers any portable business items carried in the course of your business for theft and accidental loss or damage. This includes items such as tools and mobile phones, as well as tablets, cameras and other such equipment. It can also include copper products, such as wires and pipes.
You must remember that items stolen from an unlocked vehicle are generally not covered. If you have a ute, you must put your tools in a locked box that is securely attached to the vehicle or chain them up to the vehicle itself or within the locked cab. Proof of ownership for items like tools is often an issue when making a claim. If you don't have receipts, you can take photos and make a record of the serial numbers to make sure the claims experience is quick and easy.