Do I Need to Insure my Contractors Against Injury?

Hiring contractors? Don’t assume they’ll be covered for injuries, illness or third party damage by their own workers’ compensation insurance.

While contractors are required to have their own worker’s compensation insurance, in some cases a workers comp insurer may consider the contractor you have working for you is, in their eyes, an employee. This can even be the case if the Australian Taxation Office views the worker as a contractor.

Each state and territory has its own rules around the demarcations between employees and contractors/sub-contractors for workers’ compensation, so check the relevant websites… if you’re still unsure, seek legal advice.

If this all sounds like an unnecessary use of your time, think again. In Australia, it is compulsory for all employers to have adequate workers’ compensation insurance to cover their employees. And as a hirer, it’s your responsibility to work out whether that means you also need to cover any – or all – of the workers you consider to be your contractors. 

If you don’t take out insurance, or pay the appropriate premium, and you’re caught out, you may have to pay the premium plus penalties of up to 100% of that amount.

But My Contractors Have Their Own insurance

Even if the workers you hire are deemed to be contractors, and they have their own insurance, that may not provide you with the protection you need.

Make sure you sight all of their policies to ensure they’re appropriately covered in the event of accidental loss or damage to a third party’s property. Look for insurance policies that cover contract works, public and products liability, professional indemnity and workers’ compensation insurance. You don’t want to pay the price of legal action in the event that your contractor damages a client’s property and they don’t have enough public liability insurance to cover the costs.

What Are My Options?

To avoid the need to take Workers Compensation insurance for your contractors, you can engage the Ayers Group to manage your contractors on your behalf. As a labour on-hirer, we employ contractors and manage their obligations, while enabling them to take up the contracts of their choice. As such, we also manage their contract administration, payroll, and workers compensation insurance obligations.

It’s easy. Talk to an expert at the Ayers Group today.