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 and accident’
policy is NOT the same as ‘workers compensation’.
Many self employed people or members of a partnership who
own a business in which