Do plumbers need Professional Indemnity?

There was a time when plumbers simply turned up and replaced a washer, installed a tap and re-seated the shower.
Then builders and developers asked the tradie for a copy of their public liability insurance policy, why? The policy was to protect the contractor against property damage or personal injury to a third party.
Now to get onto the same worksite some developers and builders are asking the plumber to have professional indemnity insurance. This is because the plumbers advice may expose the developer to being sued by a third party for loss, injury or property damage that wouldn’t be covered by the plumbers liability policy.

Is Professional Indemnity Insurance Compulsory?

If your business is at risk from third party claims from a loss as a result of your advice, you should consider professional indemnity, although in Australia it is not compulsory.
What other trades should consider it?
Plumbers are not the only trade that might be exposed to such claims. AV installers, Builders, Carpenters, Electricians and Landscapers are also some of the tradies that might be at risk.

How much Professional Indemnity cover should the Tradie have?

General you should have enough indemnity insurance to cover any potential loss from the advice that you give, for instance look at the potential claims scenarios below, but if your unsure check with your insurance broker.

Claims Scenarios

A builder recommends a style that results in the property owner losing money after a valuation.
An electrician recommends a switch that becomes obsolete and can’t be replaced requiring an expensive refit.
A landscaper recommends a design in that results in a lower property valuation.

Should I have the same insurer for liability and indemnity?

Some insurers will offer a combined coverage, however others will specialise in one or the other. It is worth getting a number of quotes from different insurers to compare, also check the policy features, inclusions and exclusions, if you’re unsure check with a broker.

 

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