Have you ever made a mistake on the job and wondered, am I covered for Faulty Workmanship? If you have you're certainly not alone.
When you're talking about Public Liability Insurance, claims involving faulty workmanship are all judged on the specific circumstances and will be reviewed by the insurer on a case-by-case basis. So while we can't tell you which specific claims would be covered and which wouldn’t, below is a guide to the fundamentals of Faulty Workmanship in regards to Public Liability Insurance for tradies.
What is Faulty Workmanship?
We're all human, so repairing defective work is going to be necessary for every tradesperson throughout their working life. You might have measured something incorrectly or used the wrong part leaving you out of pocket for fixing the mistake.
But if your faulty workmanship has caused property damage or personal injury to another person, that's when things can become more complicated and you should get in touch with your insurer.
Am I covered for Faulty Workmanship under my Public Liability Insurance?
The good news is that certain aspects of faulty workmanship will usually be covered under a standard Public Liability Insurance policy. Each case is different, but in general terms, the costs that happen as a result of property damage or personal injury caused by faulty workmanship will be covered.
There are some products where you can insure the costs of rectifying your Faulty Workmanship, but there's usually a $5,000 excess so it's really only meant to help you out when a large claim has happened.
Most Public Liability policies will not cover the costs associated with rectifying the faulty workmanship itself, regardless of whether this work is done by you or another business. So if your customer is unhappy with your work, gets someone else in to fix the mistake and then sends you the bill, it's unlikely that you'll be covered under your Public Liability Insurance policy unless there was actual physical damage that had to be repaired.
How to reduce the risk of a Faulty Workmanship Claim
While mistakes are inevitable, there are certain steps you can take as a tradesperson to help preserve your reputation and your business, such as:
Be clear with your customers from the start about the scope of work you are completing and provide written documentation where possible.
Be sure to communicate and document any changes that occur throughout the completion of a project.
Upon completion, confirm with the customer that work has been completed to their satisfaction.
If there are any disputes or concerns, try to work with your customer to address them appropriately. Maintain good communication where possible and document any issues that occur.
Consider options such as refund, repair or replacement. Remember there's usually a $500 excess on any property damage claim, so for small incidents it's sometimes better to protect your reputation rather than fighting it out.
If at any stage you think that things might be going south, contact your insurance broker to discuss your options so that you can make informed decisions.
And if there's a possibility of that incident resulting in a liability claim, it's important to notify your insurer.
Faulty workmanship can be a confusing area of insurance, you won't find a black and white list of things that are and are not covered because every case is different.
The main advice we can give is to consider arranging your Public Liability Insurance through an insurance broker so that you have access to advice when you need it.
Original article published by PSC Connect