Insurance coverage with ‘Worker to Worker’ claims
Without the right insurance coverage, engaging Sub-Contractors and or Hired labour can potentially expose your business to Worker to Worker claims, which in turn could have serious financial and reputational consequences for you and your business.
We outline what you need to know when engaging subcontractors or hired labour.
What is Worker to Worker liability?
Consider your typical building site. It usually would have a large number of workers on site at any one time. This can create considerable exposure to incidents that involve both third party property damage and bodily injury. This exposure increases further with heavy plant and machinery, demolition, unfamiliar building sites not to mention working with contractors and subcontractors who are not your usual tradesmen.
Worker to worker claims relate to injuries to labour hire staff, contractors, sub-contractors or employees of any contractors or sub-contractors who are doing work for, or on behalf, of your business. You owe a duty of care for the health and safety of these workers.
Although Workers Compensation is run differently in each state, typically an injured worker will make a claim from their employer’s Workers Compensation insurer. The Workers Compensation insurer will investigate the circumstances of the claim and if the injury may have been contributed to by your business, they will seek to recover the costs from your Public Liability insurer.
Doesn’t my public liability insurance cover any contractors or hired labour that I may engage?
No, normally not. As part of your normal business practice, you should obtain confirmation from any subcontractor or hired labourer that they have Public Liability Insurance in place before they undertake any work on your behalf.
How can I protect myself from Worker to Worker claims by contractors or sub-contractors?
Worker to Worker claims can take many years to settle and often incur substantial costs. As a business owner, the use of subcontractors and hired labour needs to be disclosed to your liability Insurer to ensure your business is protected should a claim arise.
While insurers all handle the engagement of these contractors differently, a Resilium Adviser can certainly source the most suitable cover for your own individual needs.
What could happen without sufficient insurance coverage?
The following real case study examples demonstrate just how important it is to understand Worker to Worker claims and liability.
Claim 1: A claim was made by a senior project manager for debilitating injuries sustained from falling through an unsecured penetration on a hospital construction site. The insurer interviewed the Director of the company and learned that he had sub-contracted the relevant work orally to another company, which meant he was not covered and the claim was rejected.
Claim 2: A claim was made by a bricklayer in relation to injuries sustained from falling from the scaffolding which had collapsed underneath him. Contractual indemnity clauses re-directed liability to the scaffolding subcontractor for costs associated with the injuries.
As a business owner, remember that the use of subcontractors and hired labour needs to be disclosed to your Liability Insurer in order to ensure your business is adequately protected should a claim arise.
Talk to a Resilium Adviser for tailored insurance advice.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Resilium directly.