On this page
- How can a subbie's injury become a claim against you?
- If your subbie gets hurt, does WorkCover pay or does your public liability?
- How much control makes it your problem?
- What did one builder face when a worker was hurt on site?
- What does the subbie question on an application decide?
- What should you do before a subbie starts?
- FAQ
"They're self-employed, so their safety is their problem" is a common belief. It is wrong. When a worker is hurt on a builder's site, the claim is often against the builder, usually with a higher excess.
How can a subbie's injury become a claim against you?
Calling someone a subcontractor does not, on its own, decide whether they are your worker for workers compensation. Your responsibility for how you run your site and direct the job stays with you.
When a subbie is hurt, the name on the invoice does not settle who answers for it. An injured subbie's lawyer looks past the subbie's own company to whoever directed the work and controlled the site, and serves them too.
For a subcontractor who is not your worker, you pay no workers compensation premium. Hurt on your job, they can be a claim on your public liability, which moves the risk onto your policy.
If your subbie gets hurt, does WorkCover pay or does your public liability?
It depends on whether the law treats them as your worker. A claim can come in two ways, under different policies, and both can land on you.
WorkCover, if they count as your worker. In Queensland, a subcontractor can count as your worker for workers compensation if the work you engaged them for is not part of a trade or business they regularly carry on. One of these must also be true: they do not sublet the job, they do not employ anyone, or they employ someone but still do part of the work themselves. Then the injury is a WorkCover question, and our Trades Insurance page explains how that test can catch you.
Your public liability, if they do not. A genuine independent contractor is outside your workers compensation but can sue you for negligence. Public liability exists to answer that personal injury claim, provided the policy was set up knowing the exposure existed.
How much control makes it your problem?
The more you direct how, where, and when the work is done, the stronger the case that you owed and breached a duty of care. The same goes for controlling the site, and for creating or leaving the danger.
At one end, a specialist contractor brings their own crew, equipment, and method. They do a defined job you do not supervise and are hurt through their own system of work. The case against you is weak.
At the other end, you set the day, the task, and the order, on your scaffold and your site. A hazard your job created or left in place hurts them. The duty that follows direction and control was yours, and the case against you is strong.
What did one builder face when a worker was hurt on site?
Case
On a house one of our building clients was constructing, a delivery driver engaged by another business was seriously hurt in a fall. He was not our client's employee, so this was never a workers compensation claim from our client's side. It arrived as a personal injury claim against the builder, through lawyers.
Two things mattered in the first week. First, the builder's public liability policy carried two excesses: a standard one of $2,500, and a higher one of $10,000 for injury to any person engaged to work in any capacity. Because the injured man was claiming as someone working on the site, we told our client from day one to budget for the higher figure, and that is the one the insurer applied. Second, lodging properly and early meant the insurer's lawyers took over the defence, including pursuing the driver's own employer for a contribution.
The claim is still being defended.
What does the subbie question on an application decide?
What you declare paying subcontractors commonly governs your cover when a person engaged to work for you is injured, and on many wordings it is what switches that cover on. The declaration adds no cover for damage a subbie does to other people or their property.
Owners who declare nil, then engage a subbie mid-year, can be carrying no cover for this exposure. A direct insurer selling on general advice is unlikely to ring to tell them. We regularly see direct-insurer wordings that exclude personal injury to subcontractors unless subcontractor payments were specifically declared. Some schedules, the pages at the front of a policy that list its terms, handle it with a bigger excess instead. One cleaner's schedule on our contractor public liability page carries a $20,000 excess for injury to a subbie or labour hire. It is written on the basis that none are used.
The figure you declare also sets the price. Subbie injury claims are costly, so insurers now charge for the exposure, sized by your annual subcontractor payments. The trade calls this "worker to worker", often the wording next to the larger excess on a schedule.
On the business package wording we usually place, personal injury to subcontractors is generally covered automatically, and we check the wording says so. Where a wording does not include that cover, we have it noted on the documents or include a nominal subcontractor payment on the application.
What should you do before a subbie starts?
- Run the site as if the duty is yours, because it may be. A documented safe system of work, real inductions, and hazards fixed rather than tolerated reduce the chance of an injury. They are also your evidence if a claim comes.
- Put the subbie relationship on paper. Sight their certificate of currency before they start, every time. It means their policy is paid and current until its expiry date. Where you can, have your business noted as an interested party on their policy, though that does not by itself make you an insured under it. If their insurance is real and responding, the pressure on yours drops.
- Have your own cover match how you use subbies. Get the subcontractor declaration right, and know the worker-to-worker excess before you need it. An injury claim can be far larger than a damage claim, so set the limit for the injury.
FAQ
Am I liable if my subcontractor gets injured on my site?
You can be. If you directed the work, controlled the site, or created or left the hazard that hurt them, the law can find you owed and breached a duty of care. That claim falls under public liability. Consolidated Insurance Brokers reads the public liability wording with you, so you know where you stand before a subbie gets hurt.
Doesn't their own insurance cover them?
Not against a claim on you. Their income protection or personal accident cover responds for their lost income. They can still sue you for negligence. Plenty of contractors carry no injury cover at all, which makes a claim against you more likely. On one claim we handled, a contractor who, by their own account, had no injury cover of their own was hurt at a client's business, and the story is on our public liability page.
What excess applies if a worker is injured on my site?
Often a much higher one than you expect. Many liability policies carry a standard excess and a separate, larger excess for injury to anyone engaged to work, sometimes called a worker-to-worker excess. We find that excess and tell you about it before any claim.
Why does my insurer ask about subcontractor payments, and what happens if I say nil?
On many wordings, that declaration switches on your cover for injury to subcontractors. Declare nil, engage a subbie mid-term, and you can be uninsured for that injury. If your circumstances change mid-year, tell your broker. We ask the insurer to switch that cover on for our clients.