Tuesday, April 12th, 2011

Almost every business uses contractors in some form or another but most do not have a formal process to monitor the compliance of their contractors, a practice that would protect them from both financial and reputation damage.


When using any profession or trade ensure they have the necessary accreditations and that they are kept up to date. An unqualified contractor may lead to expensive rework or even cause additional damage. Some contractors may have their accreditations revoked or not renewed, it is essential to have a system that ensures that accreditations are kept current.

Workers’ Compensation
As well as the ethical considerations of ensuring the contractors’ employees are properly protected the principal contractor can be held responsible for the Workers Compensation of the contractors’ employees on their site. Specifically, in NSW if a contractor doesn’t have paid up Workers’ Compensation for their employees the Principal can be held responsible for unpaid premiums

Public Liability
Contractors can and do cause damage or injury whilst undertaking their business. If they are uninsured there may be no recourse to obtain compensation from them, leaving you out of pocket.

Professional Indemnity
Negligent advice from professionals can cause significant loss to your business which may not be funded by the contractor if they are uninsured. It is crucial to keep track of professional indemnity insurance for 6 years following the work even if you no longer deal with the contractor as coverage under the policy ceases at the expiry of the policy and passes to the new policy, this means that if they don’t renew their insurance there is no cover for past losses.

It is vital to continually monitor contractors’ compliance documents to ensure they are renewed, many companies make the mistake of checking once and forgetting about it. A good system for tracking compliance will allow a company to obtain the information from the contractor, verify it against company needs, follow up again at renewal and store the past information indefinitely.

John Simmons, Managing Director of CertTracker says there is no excuse for companies lacking a system to track their contractor’s compliance “$10 per contractor to use a system such as CertTracker is a small price to pay to have peace of mind that your contractual risks are mitigated and is probably cheaper and more reliable than doing it yourself.”

Speak to your risk advisor or insurance broker about what your contractor risks are and CertTracker can work with you to build a cost effective system to monitor them.

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CertTracker is an Australian owned and operated contractor compliance company with clients in government, property and financial sectors.
John Simmons
P: 02 8080 3629
M: 0400 024 789
W: www.certtracker.com.au


Risk Management, risk, insurance, workers compensation, contractors, business, small business, sub contractors, franchise, tenant, cleaners, trades, public liability, professional indemnity, associations, compliance, loss



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