The Master Painter Australia - April 2016 Vol. 1 - Page 20

THE MASTER PAINTER AUSTRALIA 020 INDUSTRIAL RELATIONS Insurance when hiring subcontractors in the construction industry There are many types of insurance available for contractors in the construction industry. Whilst some insurance is discretionary and must be purchased on the basis of a commercial decision by the contractor as to the likely need for such insurance, other types will be mandatory either because of legislation or because a client will insist on such insurance being held. The problem of deciding what insurance is necessary becomes more complex when a specialist contractor hires another contractor, in other words a subcontractor, to carry out some work on its behalf. The subcontractor might be in the same trade as the specialist contractor, or, may be from another trade. For example, a plasterer might hire a specialist cornice fixer or a painter to carry out specific tasks. If a specialist contractor hires someone in the same trade simply to share the workload, then the person hired almost certainly will be an employee. If the hired person is paid as a subcontractor, then the hirer almost certainly is breaking various laws, which will not only leave the hirer open to prosecution but also may affect the validity of their insurance policies and leave the hirer personally open to claims for damages. Workers compensation is the most important form of compulsory insurance. All states of Australia require an employer to have a workers compensation policy. It is important to note that a ‘sickness a