Subbies and SME's a Insurance Perspective

There are many facets to the Employee Versus Subcontractor for SMEs let's consider your obligations as far a the legal pitfalls in using Subbies in your business. Subcontractors are further affected by ATO and Super Compliance but these issues will need separate discussion on their own merits and I recommend that all SME’s get some actual advice on that. Like paid advice please not what Uncle Bob tells you at the family BBQ.

Firstly while you would assume your subbies are covered under your Business Insurance they may not be so check first, because we all know what ASSUME stands for.

Know what insurance covers what. Generally public liability insurance covers damage and injury to third parties so make sure your Public liability has a subcontractor clause. Professional Indemnity covers the subbies “advice” so make sure that is in your Business Pack also.

Subcontractors legally become a extension of your business so I have a nice little checklist of what my clients should do to engage a subbie.

1. Check that each subcontractor has Professional Indemnity & Public liability Insurance in their own right and Workers Compensation Insurance if they have employees. You need to see Certificates of Currency as a non negotiable.
   
   
2. Speak with their referees for peace of mind
   
   
3. Verify their qualifications where relevant|
   
   
4. See if they’re on the insolvency list of the Australian Securities and Investments Commission
   
   
5. Use a legal contract
   
   
6. Add a clause that sets out the contract is null and void if the contractors does not provide proof of current appropriate coverage
   
   
7. Check their ABN and if they are appropriately licensed
   
   
8. Implement a system to regularly check for insurance and licensing renewals