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Can I get workers compensation as a contractor or sole trader?


Becoming a sole trader, contractor or sub-contractor is growing in popularity as more people crave flexibility and control over their work life. While there are benefits to all involved in having sole traders, contractors and sub-contractors in the workforce, there are some things these workers need to consider to ensure that they are safe at work and to protect them if they contract an occupational illness or are seriously injured on the job.

What is the difference between a contractor and a sub-contractor?

A contractor is an individual or company that works directly with the client to complete a job, service or provide materials. A contractor is not always an employee of the client, which means that while they are entitled to a safe and healthy workplace, they are generally responsible for their own insurance cover. Depending what was agreed between the contractor and the client, both parties workers compensation and liability insurance obligations will need to be considered.  

A sub-contractor is another form of contractor; the biggest difference is sub-contractors deal with the contractor rather than directly with the client. There are also major contractual differences for sub-contractors.  

Are you covered by workers compensation as a contractor or sub-contractor?

Workers compensation is compulsory for all employees in Australia. Contractors and sub-contractors are usually considered workers when they are engaged to perform work on behalf of a business – they must also be directly paid for the work undertaken. They will need to be covered by a workers compensation policy by the principal employer.  

Before embarking in work as a contractor or sub-contractor it is important to understand who is responsible for covering the obligations for workers compensation insurance.

Each state and territory’s WorkCover insurance scheme varies in relation to contractors and sub-contractors so be sure to check with the workers compensation authority for your state or territory.  

Can you get WorkCover as a sole trader?

Generally speaking, a sole trader is not deemed to be a worker and therefore cannot take out workers compensation insurance to cover themselves in the event of injury. It is recommended that as a sole trader you take out a more suitable policy like a personal accident and illness policy, or a suitable income protection policy to keep yourself covered.

However if a sole trader employs contractors or sub-contractors, then the obligation of the sole trader is to have a workers compensation insurance policy that covers the contractors in addition to the cover they require for themselves. 

Contact Shine Lawyers - know your rights before something goes wrong

If you have been injured in the course of your work, you should explore your avenues for compensation. Our expert workers compensation lawyers can help you understand your rights as an injured contractor or sub-contractor and assist with your workers compensation claim on a No Win, No Fee basis. Get in touch today for an obligation free appointment.

Written by Shine Lawyers. Last modified: June 4, 2020.

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