Electrical and communications contractors are the latest group to voice frustration over the way insurers deal with professional indemnity (PI) proposals. 

The contractors’ peak body, the National Electrical and Communications Association (NECA), says insurers don’t understand the risks associated with electrical contracting. Victorian CEO Phillip Green says PI premiums are becoming unaffordable for most electrical contractors. Only 20% of his members do work that requires them to hold PI cover, but that number is steadily growing.

“More and more builders, or head contractors, are likely to contractually request that the electrical sub-contractor has PI insurance in place,” he said.  “There is a growing trend towards builders trying to minimise their risk by relocating the risk elsewhere.”

Mr Green says many insurers wrongly assume that because contractors are installing they are designing. “We are endeavoring to build a picture of the industry so that our brokers can attempt to ‘sell it’ to the insurers,” he said.

National Insurance Brokers Association President and PI expert Frank Earl says the main issue for insurers is not that they don’t understand the risks involved, but that many electrical contractors don’t hold adequate qualifications.

“The problem is that the vast majority of these people will not hold a tertiary qualification like an electrical engineer,” he said. “This is the principal reason why insurers will be reluctant to give them cover.”