As a businessperson, you know how crucial the correct insurance cover is for you, your employees, and those who happen to be in your place of business. Most people are familiar with the types of compulsory insurance for Australian businesses:
- Worker’s Compensation Insurance – A policy is necessary to protect those you employ from injury or death while at work.
- Public Liability Insurance – Your policy will take care of third parties who experience injury, death, or another type of loss where you or your company are liable. However, not every Australian business must have public liability insurance, but a significant number are required to have the cover.
- Third-party Personal Injury Insurance – The protection is required if you have a motor vehicle, but it is frequently a part of in the fee for vehicle registration.
The majority of business owners are also familiar with the numerous kinds of available business insurance that are not required by law, but are a smart safety net for those who run their own companies. In the business insurance industry, new types of cover and definitions can pop up rather quickly.
One example of a term that we now see with a greater frequency is labour hire insurance. This post explains what labour hire insurance is, and why it’s important for your business.
What is Labour Hire?
Labour hire is a way of contracting out job recruitment to a third party.
Many companies find this to be a simple and efficient way to expand their staff. This is a way of bringing on the right people without all of the hassles of embarking on an extensive search for employees. Labour hire is also a useful route for a business that needs extra workers for a specific period of time.
Example: Benny owns a small catering company and has ten regular employees. This staff is typically sufficient for the events Benny books. However, Benny lands a contract to cater a significantly more substantial than usual wedding reception.
Instead of scrambling to hire qualified help, Benny contacts Jay’s labour hire company. Jay’s company sends Benny the dozen extra staff members he needs for the job. Benny pays Jay’s company, who take a fee and the pay the individuals who worked Benny’s event.
What Cover Does Labour Hire Insurance Provide?
Labour hire insurance exists to protect both the workers who are the employees of the labour hire company as well as the company who is paying for their services. Workers receive cover against accidents and injury. The company who has labour hire working with them has cover if one of the labour hire staff causes an injury or damages equipment or property.
Example: At the wedding reception Benny’s company is catering, one of the labour hire staff from Jay’s company slips and breaks their arm. This worker will have medical expenses covered by labour hire insurance. At the same event, one of the labour hire employees drops Benny’s crystal punch bowl. Benny can replace his punch bowl because labour hire insurance covers the mishap.
Who Pays for the Labour Hire Insurance?
The company who directly employs the labour hire workers is responsible for providing the proper insurance cover. In the case of our example, Jay’s company directly employs the workers who are working with Benny. Jay is responsible for the insurance for these employees.
What Types of Insurance Cover Should a Labour Hire Business Provide?
The specific kinds of insurance needed by a labour hire company will vary based on the specifics of the job. Workers from a labour hire company may do several different types of work. The details of the necessary coverage will vary based on the kind of work. Some typical examples of work a labour hire company may employ includes:
Asking your insurance expert at Connect Business Insurance about the types of insurance needed for the different types of jobs is your best bet. You can relax, knowing a minor accident will not become an expensive problem.
What Are the Required Kinds of Insurance Cover Needed by a Labour Hire Company?
While the exact cover will depend on the kind of job your employees do, these are the most common types:
- Professional indemnity
- Public liability
- Directors and officer’s liability
- Mandated worker’s compensation insurance
For further information regarding labour hire insurance and meeting Australian compulsory insurance required, please feel free to contact Connect Business Insurance. Our skilled experts can offer you customised options to make sure that your employees are covered.
Please note that the material contained in this post is for informational use only. It is not legally binding nor intended to replace specific information obtained by a professional insurance representative.