Subcontractor compliance is now a formal process on most sites. The requirements are usually reasonable; the delays come from certificates in the wrong entity name, limits below the contract, or covers nobody arranged because nobody read the clause.
The Standard Requirements
- Public and products liability, commonly $10 million or $20 million depending on the work and the principal — see choosing a limit.
- Workers compensation in each state you work in, or evidence of exemption where you are a genuine sole trader with no workers.
- Motor vehicle cover for vehicles brought to site, including third party property damage.
- Plant and equipment cover for machines you bring, sometimes with the principal noted.
- Professional indemnity, where you design, certify or advise.
- Contract works, where you are responsible for the works themselves — see contract works insurance.
The Contract Clauses That Change Your Cover
Three clauses come up repeatedly, and each has an insurance consequence.
- Principal’s indemnity. Extends your liability cover to the principal for liability arising from your work. Usually arrangeable — but it must be requested.
- Waiver of subrogation. Prevents your insurer recovering from the principal. Insurers will often agree, but not automatically.
- Indemnity and hold harmless. Some are drafted so broadly that you accept liability your policy will not follow. This is the one worth having read before signing.
Why Certificates Get Rejected
- Entity name does not match the contracting party.
- Limit is below the contract minimum.
- Business description does not cover the activity — for example, no mention of working at heights or hot works.
- Policy expires before practical completion.
- Interested parties not noted where the contract requires it.
Our guide to certificates of currency covers what each field should say.
If You Engage Your Own Subcontractors
The obligations flow downhill. If you sub out work, you should collect the same evidence you were asked for, keep it current, and be aware that in several states an unincorporated subcontractor may be deemed your worker for workers compensation purposes. That is a premium and a liability question, not just paperwork.
A Compliance Pack Worth Keeping
- Current certificates for every class, filed by expiry date.
- Workers compensation certificate for each state.
- SWMS and site-specific documents.
- Licences and operator tickets.
- A calendar reminder 30 days before each renewal.
Deemed Workers: the Exposure Behind the Paperwork
Workers compensation legislation in most Australian states can treat an individual subcontractor as your worker, depending on how the work is arranged — whether they supply their own plant, whether they work exclusively for you, and whether they are paid for labour or for a result.
The consequences are practical. Your workers compensation premium may be assessed on payments to those subcontractors, and if one is injured, the claim may land on your policy. Engaging incorporated subcontractors with their own cover, and collecting evidence of it, is the usual protection. Ask the question before an audit does.
Principal-Arranged Insurance
On larger projects the principal may arrange cover for the works — a project-specific contract works or liability programme that names subcontractors. It is genuinely useful, but read what it does before standing down your own cover:
- It usually covers the works, not your plant, vehicles or tools.
- It rarely covers your liability away from that project.
- It ends when the project does, often before your defects liability period.
- The excess may be substantial and payable by the party at fault.
A Mobilisation Checklist
- Insurance clause reviewed and priced before signing.
- Certificates issued in the exact contracting entity name.
- Limits at or above the contract minimum, extensions arranged.
- Workers compensation in the state where the work is performed.
- Plant schedule current, with any machines coming to site listed.
- Your own subcontractors’ certificates collected and diarised.
- Renewal dates flagged against the project completion date.
Common Questions
I am a sole trader with no employees. Do I need workers compensation?
Requirements differ by state, and principals often ask for evidence either way. Personal accident cover is what protects your own income — see personal accident insurance.
Can the principal’s policy cover me?
A principal-arranged programme may cover the works, but rarely your own liability. Read what it actually does before relying on it.
How quickly can limits be increased?
Often the same day, for the remainder of the policy period.
Talk It Through
Send us the contract’s insurance schedule and we will tell you what you are missing. Get in touch or call 1300 983 940.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.