by Leo Wiles
01 June 2016
Hi Rach and Leo, I’m shortly to spend three days a week in an office as a freelance writer. I have been asked by the editor to provide details of personal insurance that would cover any potential health and safety issues while in the office. Without proof of such insurance, I won’t be able to work in the office. I have worked with freelancers for years and I have never heard of this before. Do you know what kind of insurance she may be talking about? [NB on my early inquiries, it’s not death and permanent disability cover associated with superannuation, nor is the freelance cover MEAA offers — that’s for public liability and professional indemnity. So… strange!] Thanks! Carmel
Hi Carmel, I’m not surprised you’re confused. Insurance is a confusing minefield with some submersive variables that are as easy to find as Douglas Adams’ plans. Which Hitchiker fans may recall were “on display in a dark cellar, in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard’”.
Comsure Insurance Brokers’ Melissa Berglas was kind enough to be our voice of reason and navigator for the following insurance advice:
Q. What is ‘Personal Insurance’? In Carmel’s case, the term refers to any damage or injury that she can be personally be liable for. If some sort of freak accident occurs where her laptop malfunctions and causes a fire and that fire damages property and causes injury to staff then the event is a workplace health and safety issue for the company she is contracting to. However for Carmel, she is personally liable for the injuries and damage. Workcover, the company she contracts to and any of their staff all may take legal action against her for costs and damages resulting from the fire. This example is covered under a Public Liability policy.
Q. Okay, so what does Public Liability protect you from? Statutory Liability provides protection for Australian businesses’ exposure to statutory fines and penalties handed down for breaches of legislation such as: Workplace Health & Safety Acts, Employment Practices Laws, Environmental Protection Authority (EPA) Legislation and Spam & Privacy Laws. Specifically in relation to Workplace Health & Safety, all workers, which includes contractors and sub-contractors, have duties under the Workplace Health & Safety Act. These duties are defined in this link published by the Australian Govt for contractors. Carmel just needs to check that her public liability policy includes cover for Statutory Liability and then provide proof.
Q. Why does the company want her to have it? To protect herself. If Carmel’s contracting in her own name, then any assets she owns could be lost. The first thing a lawyer looks for is an insurance policy to claim against or property. A lawyer will do a property search and if there is anything worth taking, will consider going for it.
Q. Is insurance on the increase because we have a growing freelance / contractor sub contractors landscape now? Or because we’re headed the way of America with more law suits and people being sued? Many Australian based insurance companies have paid millions of dollars in claims for the actions of contractors/sub-contractors that their policy holders have engaged. As a result the insurance companies are restricting cover and now are not automatically providing cover for contractors. The reason why you are seeing an increase of insurance requirements is that the company you are contracting to are no longer insured for your duties/actions as a contractors/sub-contractor.
Q. What proof can Carmel provide that will satisfy the clients HR dept? IE does the certificate have a name or does she have to supply the whole policy? A certificate of currency is usually acceptable.
Q. How much can Carmel expect a Public Liability Insurance policy to cost? The cost is based on the type of work you do, how many employees you may have, your turnover for 12 months and whether you have had any claims. As a guide though, the cost is usually between $300 – $800 for a sole trader or very small business with 1-2 employees.
As a freelancer, which types of insurance have you taken out and why?
Hi Rach, Leo: for Carmel, In my experience, I’ve had private company insurance for public liability – that’s what it was called –
and was a costly. So not that I’m financially involved at all, the MEAA has an option titled Freelance Pro. That’s been designed for freelancers and details can be found on MEAA website. As a freelancer, I would also double-check, if at all possible, the actual employer’s options on coverage. Good luck with the job!
Robyn Short
Hi Robyn, I did get the expert to take a look over the MEAA option as I know that it could seem like an obvious choice for most of us. Her opinion, to simplify was that ‘there are a few considerations that are worth clarifying’ and to watch out for the small teeny print and words such as Is the policy a “Claims Made” or “Occurrence” based wording? AND one of her other touch points was the Limit of Liability including defence costs not being as great as it sounds… I for one am a complete Luddite when it comes to reading the telephone directory size policy that follows a new contract. Which is why Rach and I were thinking of a follow up to really give us all a buyer beware lowdown – do you think that sounds like something you’d read?
Great idea, I’d read it for sure!
Just a tip for Carmel – she can get the cover required and cancel it as soon as her work at that office finishes (as long as her other jobs don’t require it). She will then get a refund from the insurance company for all the unused cover. This is a way to provide the insurance and not have to pay for cover you don’t need ordinarily.
Once established, it often just needs a phone call to reactivate the cover and secure a new certificate of currency.
Hi Lynne,
As someone who had to take out insurance on a house I didn’t own, that was already insured by its owner-occupier, because of some archaic Qld. law that only shows up when you’re buying a house… well you are preaching to the choir. I hate being out of pocket for a service I’m not using. Just ask Tesltra landlines department.