Tradesman’s guide to Public Liability Insurance Cost in NSW
Just like the cost of living and real estate is higher in NSW compared to other states, the premium quoted by insurers for Tradies Insurance in NSW is higher compared to other states also.
CoverTradie insights on pricing of Public Liability Insurance for Tradesmen will help you get an idea of what prices are being offered and what you should accept.
The table below shows the cost of Tradies Public Liability Insurance in NSW based on the quotes we have observed from the major insurers without naming names.
It’s easy to see that there is a huge variation between the cheapest, average and the highest premiums we have observed.
There are a range of factors that result in such variation which we will cover later but it highlights that two facts:
- There is no “one size fits all” when it comes to insurance pricing
- You really want to be talking to someone who has a good understanding of insurance premiums to make sure you get on the best deal and not be happy with the averagely priced insurance.
So what drives such a huge variation in the pricing?
There are a few factors some more specific to particular insurers but most commonly:
- Is there any consumer protection legislation for your trade that results in higher claim volumes, which increases insurance costs
- Your occupation risk – not all trades carry equal risk
- Business activities within your occupation – not all business activities carry equal risk
- Size of your business – higher turnover and staff count usually means higher risk of claims
- The market factors in a particular state, competition etc.
Public Liability Insurance cost comparison by trade
Out of the 5 common trades we compare here, you’d find that Plumbers Insurance is the most expensive followed by Concreters. Carpenters, Landscapers and Electricians are priced quite similarly. See charts below:
The prices are for $20million public liability quotes we observed for businesses ranging from $100k to $500K in turnover. See table below for the cheapest, average and highest prices for public liability insurance in NSW for 5 common trades.
What happens to the price of insurance as your business grows?
Regardless of what state you work in, as the business grows, the risk of claims also increases. Insurers know that and hence they increase the premiums as your business grows. See chart below:
Insurers consider that risk increases as a business grows.
During the growth phase of a business, the attention of many tradies gets a little stretched. Not everyones’ but some. That can result in claims and insurers know that. They price the insurance accordingly.
For many business owners, it’s the apprentice supervision that is a problem. Its not uncommon to see the claims increase with increased number of staff and junior apprentices
The controls & risk management in a business that prevent claims and stuff-ups become strong over time. There is a period when they are weak which result in claims.
You can see the impact of turnover on pricing from the table below.
Key points to note from this table are:
- Lower turnover means lower risk in general
- Notice all categories of prices i.e. cheapest, average and highest, they all increase with increase in turnover.
There are opportunities to save money regardless of what your turnover may be, an example of that is give below. In this chart we show how the various premium categories for Plumbers in NSW.
You can’t control what insurers think and how they price insurance. You can make a choice of insurer and your broker. That will save you money.
So, select a broker who knows what they are doing so they can help you get where you want to – FASTER.
CoverTradie is a specialist insurance broker for tradesmen. If we can be of help to you, please give us a call. If you found this article useful, please consider sharing it on Facebook to help us get the word out.