Owner Builder Risks NOT Reduced by Workers Compensation Insurance. Zero Protection.

November 10, 2018 12:20 pm Published by Leave your thoughts

Over past 10 years Qtrust Team has NOT sold Workers Compensation Insurance to owner builders. We’ve heard it before, unethical sales tactics aimed to fear and scare owner builders into buying what they really don’t need and cannot claim against nor benefit from, is nothing short of unprincipled, deceitful sales tactics.

Owner builders are exposed to many risks, none more risk prone than subcontractor actions, on-site subcontractor injury or worker to worker actions, including sole traders undertaking smaller construction activities. But first examine the facts: owner builders like registered or licenced builders hold a legal obligation which was agreed and signed up to, when applying for owner builder accreditation. Owner builder’s licence or certificate of consent is issued upon a pre-condition which amongst other conditions contains an agreement to engage appropriately qualified, skilled and insured subcontractors, including sole traders, but excludes employees for owner builders are not in the business of building for profit.

An owner builder considering hiring employees, labours for example, and paying hourly rates, should seriously consider their position. Employees are entitled to statutory entitlements such as super, holiday and sick benefits including holiday pay and loadings. Then taxes need to paid and super must be transferred into the employee’s super fund. These items are not negotiable, they are statutory and legally binding. Workers compensation is one of these statutory requirements when employing employees.

Owner builder are in the business of construction or renovating their family home. They are not expected as hands-on supervising and managing employees at a work place. They engage or hire sub-contractors who possess appropriate skills and resources to undertake necessary tasks. They are not employees by any manner of means or imagination: they are independent contractors.

An owner builder cannot trigger workers compensation insurance, as cover applies exclusively to employees injured at their workplace. Workers compensation is only available to employees. Employers hold responsibilities to ensure their employees are covered. Contractors, subcontractors including sole traders, when engaged under their professional skills or trades are not employees. Subsequently, owner builder risks do not lie in workers compensation, for this argument is too simplistic and fundamentally ill-informed. Owner Builders do however face risk from ‘being sued’ by health funds, workers compensations conglomerates and statutory bodies, demanding financial recovery for costs incurred for an injured subcontractor. But these action are not workers compensation insurance matters; they are liability matters and a quality owner builder insurance cover will meet these critical risk elements. In essence, holding workers compensation insurance for non-employees means zero, for the idea a workers compensation insurance company would sue itself to recover costs is most unlikely to the absurd. An owner builder with property assets has very much more appeal, and that’s ‘what requires protecting’.

Qtrust Owner Builder Insurance specifically focuses on protection of personal and financial assets and achieves these important goals in plain English, in writing and within its Product Disclosure Statement.

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This post was written by Technical Underwriting Centre

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