Tradie Guide to Professional Indemnity Insurance

Professional Indemnity insurance may not be the most obvious type of business insurance for tradies in New Zealand, yet in reality it can be relevant and very handy given the fact that many tradies provide professional advice to their customers for a fee.

While Public Liability insurance ensures your business is financially covered for any damages or injuries that occur as a result of your work, Professional Indemnity insurance covers you for the consequences of the advice you give to your clients. 

While many tradies may preference other types of trade insurance, Professional Indemnity insurance may also feature in their risk management strategy as an additional layer of risk reduction. BizCover enables individuals in trade occupations to compare competitive Professional Indemnity insurance quotes online and get covered in 10 minutes

Professional Indemnity insurance is a type of trade insurance that can come in handy for tradies in instances where a client asks for your expert and informed opinion. In your trade role, if you give recommendations to your clients, and your advice causes financial loss for your client, there can be a chance that they will lodge a Professional Indemnity claim against your business for financial losses suffered.

Why Professional Indemnity Insurance matters for tradies

If you’re an electrician, a carpenter, a plumber, a mechanic, or any other flavour of tradesperson, sharing your tradie expertise with your clients may very well form part of many of your interactions with clients. However, in some instances, through no fault of your own, your advice may lead to financial loss for a client. And this is where Professional Indemnity insurance can reduce your risk.

Professional Indemnity insurance protects you against third-party claims, including the costs involved in defending costs arising from alleged or actual negligence regarding your professional services. As such, it may prove very handy for your tradie business.

Professional Indemnity insurance can come in handy and may be something to consider if you do have customers that rely on your advice. Professional Indemnity claims may also arise from instances where you don’t do something, such as failing to meet a deadline, failing to meet a client’s expectations, or misplacing or losing important documentation.

As a tradie you may not routinely offer your professional advice directly to your clients for a fee, as engineers and architects typically do. As such, you may not feel that Professional Indemnity insurance can play a role in reducing your risk.

However, you may be liable for a Professional Indemnityclaim, even if you don’t formally offer advisory services for a fee. The line between professional advice and personal opinion can be blurry at times, and that may lead to disputes that, if played out, may end with you being on the receiving end of a Professional Indemnityclaim. If in doubt, tradies may talk to a business insurance professional about their Professional Indemnity cover.

Examples of risks that Professional Indemnity Insurance covers

While the specifics of any given Professional Indemnity policy may vary, generally speaking the following instances may be covered under Professional Indemnity insurance for tradies: 

  • Providing your client with misleading or negligent advice.
  • Breaching your professional duty.
  • Defamation, libel or slander.
  • Loss of or damage to documents.
  • Infringement of intellectual property.

 Examples of risks that Professional Indemnity Insurance won’t cover

  • Intentional damage or misconduct.
  • Contractual liabilities.
  • Professional fees refunds.
  • Known claims and circumstances that may have occurred prior to the period of trade insurance.

How much Professional Indemnity cover do I need?

BizCover NZ offers Professional Indemnity cover between $250,000 to $10 million. To help determine how much cover your business may require, consider the following:

  • The potential risks and the potential cost of a claim.
  • The value of projects you work on or the value of your services.
  • Statutory requirements for your profession.
  • Requirements of any professional body or association that you are a member of.

It’s important to note that as your business grows it can be in your interest to review your risk exposure and adjust your level of cover accordingly.

Reduce your tradie risk with Professional Indemnity Insurance

Whether you’re a sole trader or a jack-of-all-trades trade professional, you know how much effort goes into a day’s work for a tradie. Being a tradie no two days are the same, and when a spanner gets thrown into the works, that’s where tradie insurance can help.

At BizCover NZ we can tailor your trade insurance to suit the specific risks and needs of your tradie business, no matter how big or small.

BizCover helps tradie small business owners throughout New Zealand to reduce the risks to their business via tradie insurance*, including Public Liability insurance. Visit bizcover.co.nz and get trade insurance for your trade business without drama and get on with your day. If you’d prefer to pick up the phone and chat you can find us at 0800 249 268.

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2022 BizCover Pty Limited. BizCover Limited is owned by BizCover Pty Ltd (ABN 68 127 707 975).

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