What impact does this have on your insurance?

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Recently, we have observed that some clients have reported significant increases in the use of subcontractors compared to the prior year. Generally, the larger the proportion of your payroll to subcontractors is, the greater the impact this can have on your insurance premium. Here are the main reasons why:

What does all this mean?

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As a rule of thumb, if your wage roll has 30% or more payable to sub-contractors then insurers will look to impose a higher premium and excess, mainly because worker-to-worker claims cost insurers more.  We were recently told that a standard injury that would otherwise cost $250,000 would be as high as $450,00 if it involves a sub-contractor. 

What can you do about it?

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It is important to engage early with your Honan broker so we can obtain all relevant information to negotiate with insurers and optimise the terms available to you.  Some of the key pieces of information include:

• Split of work performed - manual versus non-manual work
• The type of work being performed
• If the work is on your premises or another site
• Whether the work is done under your supervision or solo
• If there is an induction program for new subcontractors
• Whether there are controls around waivers

With you all the way

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To find out more about managing your business’s risk exposures, feel free to reach out at any time.

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Matthew Head

Head of Client Service – Victoria

Matthew.head@honan.com.au