How do you insure plumbers, scaffolders and motor trades?
How do you insure plumbers, scaffolders and motor trades? | Insurance Business Australia
SME
How do you insure plumbers, scaffolders and motor trades?
Lifting the lid on vital cover for trades…
Life has been tough for some of our key trades in recent years – with the likes of plumbers and scaffolders hit hard by rising rates and supply chain issues. The last thing they need is to be at the centre of a claim for which they are not adequately insured.
It’s an area that Amandeep Dhaliwal (pictured), of Brisbane-headquartered agency ShieldCover, sponsor of the Medium Brokerage category at the upcoming Insurance Business Australia Awards 2024 on May 3, has been working hard to address.
The sectors ShieldCover focuses on are general trades and services, hospitality, manufacturing and property owners.
Years of rising claims numbers and tightening capacity, he said, have made working in this sector tougher.
Plumbers, scaffolders and motor trades insurance
“In the liability space, the main occupations that pose a challenge for us are plumbers and scaffolders,” said Dhaliwal. “Though we do get a lot of quote requests for these two occupations since there are not many underwriters who will accept the risks, we also have our guidelines which limit what risks we can and can’t write.”
The increasing number of claims in the motor trades space in recent years has also made finding coverages for those professions particularly difficult.
“Many underwriters have stopped offering liability products for motor trades, so the market is shrinking considerably,” he said. “The high number of claims makes those occupations challenging in the insurance market.”
Dhaliwal said many insurers are pulling back.
“Many insurers are hesitant to take on businesses with a high level of risks and a high chance of a claim,” he said.
Where are claims coming from?
He said the high number of claims for some professions in this sector can be a result of external factors outside the underwriter’s and broker’s control.
“Such as the quality of workplace training,” said Dhaliwal. “For example, a plumber didn’t install a pipe properly and the pipe leaks, causing a large water damage claim.”
Another main driver of claims, he said, is the widespread use of subcontractors.
“In other cases, like the scaffolding industry, a lot of the claims are derived by subcontractors because when the sub-contractors get injured onsite, the claims can potentially fall under the scaffolding business owner’s liability cover,” he said.
An insurance niche with strict guidelines
These challenges have created opportunities for ShieldCover.
“Because of this, the motor trades quote requests are coming in at a good pace for us at the moment,” said Dhaliwal.
He said the firm has “found our niche” and by focusing solely on a few occupations is able to offer competitive rates.
“We manage our book by having strict guidelines and risk management practices stating what risks we can and can’t write,” said Dhaliwal.
For example, he said the firm won’t offer covers for plumbers working on installations in buildings more than five storeys high.
“Having the guidelines and risk management practices in place gives the team and I the confidence to tackle new businesses in this challenging space while knowing that we’re not putting the company, our broking partners and their clients at risk of significant financial losses,” said Dhaliwal.
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