Becoming An Approved Contractor For Insurance Australia

Becoming an approved contractor for insurance companies in Australia can be a great way to increase your revenue streams. However, it is not an easy task and there are a few hoops you will need to jump through. Here is a step-by-step guide to help you get started:

Step 1: Build Up Your Professional Experience and Portfolio

Most insurance providers will expect you to have a college degree or diploma in civil engineering or a similar area of study, as well as at least five years of experience in the field. If you are a recent graduate, focus on finding a variety of jobs that will give you exposure to remodelling and construction. Always strive to offer high-quality services and ask satisfied clients to provide you with written testimonials.

Step 2: Obtain the Right Tools to Work With Insurance Companies

In addition to your professional experience, you will need to meet certain requirements to become an approved contractor. This includes having the right accreditations, such as a contractor's license and insurance. You will also need to register your business and obtain a business license.

Step 3: Nail Down the Details for Your Business

Once you have obtained all the necessary certificates and licenses, you will need to register your business with the relevant authorities. This process can usually be completed online. When registering your business, you will typically need to provide your social security number, date of incorporation, certification number, and employee information.

Step 4: Reach Out to Local Insurance Companies

After you have taken the above steps, you are ready to start contacting insurance providers in your area. It is recommended to reach out to multiple companies to find the best fit for your business. As an independent contractor, it is up to you to find work for your company, and offering your services as an approved trades professional for insurance providers can be a great way to add to your revenue streams.

Building a portfolio and gaining experience

Building a Portfolio:

• Obtain High-Quality Photographs: Before starting any construction or remodelling project, make sure to take "before" pictures. Then, invest in a good camera or hire a professional photographer to capture "after" photos that showcase the completed work. These visuals are essential for presenting your capabilities to potential clients.
• Organise Your Work: Categorise your projects into sections such as "Decking", "Kitchens", or "Second Stories". This makes it easier for clients to find specific types of projects they are interested in. Include basic information about each project, such as square footage and a brief description of the work completed.
• Include Testimonials and References: Collect written testimonials and references from satisfied clients. These endorsements will provide social proof of your skills and professionalism, making your portfolio more compelling.
• Create an Online Portfolio: Build a website that showcases your work and includes a dedicated "Portfolio" section. Regularly update the website with new projects to keep it fresh and engaging.
• Prepare a Physical Portfolio: In addition to your online presence, create a physical portfolio binder. Include high-quality printed photographs, descriptions of projects, and your contact information. This tangible portfolio can be presented during in-person meetings and provides a professional touch.

Gaining Experience:

• Education and Apprenticeship: To gain approval from insurance companies, you will likely need a college degree or diploma in civil engineering or a related field. Additionally, consider completing a three-to-five-year apprenticeship with a licensed general contractor to gain hands-on experience.
• Variety of Jobs: Seek out a range of jobs that provide exposure to remodelling and construction projects. This will allow you to build a diverse portfolio and demonstrate your adaptability.
• High-Quality Services: Always strive to deliver exceptional services to your clients. This will increase your chances of receiving positive testimonials and referrals, which are invaluable for building a strong reputation.
• Network with Insurance Companies: Once you have gained sufficient experience and built a solid portfolio, reach out to local insurance companies. Don't limit yourself to a single company; explore multiple options to find the best fit for your business.

Obtaining the right qualifications and insurance

As an independent contractor in Australia, you are responsible for adhering to the country's accounting laws and managing and paying your own taxes. You will also need to obtain the right qualifications and insurance to become an approved contractor for insurance companies.

Qualifications

To become an approved contractor for insurance companies, you will typically need a college degree or diploma in civil engineering or a similar area of study, in addition to at least five years of experience in the field. If you don't have an academic background in the industry, it may be worth investing your time in earning a diploma. Without it, it's very unlikely that you would be eligible for bids through insurance providers.

Insurance

To become an approved contractor, you will need to meet certain requirements, including having the right accreditations, in addition to the professional experience mentioned above.

• Degree or Diploma: As discussed above, if you don't already have a degree or diploma, you will need to earn one before you can become an approved contractor for insurance companies.
• Contractors Insurance: To get work through policy providers, you will need to be insured. Find out how to get custom Contractors Insurance, including commercial general liability coverage, for your business.
• Contractors License: If you don't already have one, you'll need to obtain a license for your operation. This will involve filling out the necessary paperwork and, in most cases, passing an exam.
• Business License: Before doing anything, you'll need to establish the legitimacy of your company by visiting your local licensing authority and filling out the appropriate paperwork to acquire a business license.
• Liability Insurance: Construction liability insurance is vital for protecting your company and your clients. While it depends on the circumstances at hand, it is best to obtain at least one million dollars in coverage.
• Other Insurance: Depending on your industry, you may need additional insurance such as equipment or cyber liability coverage. Shop around for the best rates and coverage options based on your specific business needs.

It is also important to understand your own insurance policies, what they cover, and what the exclusions are.

Understanding the business structure

Sole Trader

The sole trader model is the simplest and most common structure for independent contractors. As a sole trader, you and your business are treated as a single legal entity, with no separation in financial matters. This structure offers simplicity and ease of setup, as all you need is an Australian Business Number (ABN). However, it's important to note that you will be personally liable for all business debts and liabilities.

Partnership

A partnership is a legal entity composed of two or more partners. Income and losses are shared among the partners. To set up a partnership, choose a unique business name, register it, and obtain an ABN and a Tax File Number (TFN) for the partnership.

Company

A company is a separate legal entity from the owner. It must have at least one shareholder and one director. All income and losses are attributed to the company rather than the owner personally. To set up a company, register with the Australian Securities and Investments Commission (ASIC) and obtain an ABN and TFN.

Trust

A trust is a specialist structure where a trustee manages the business and its activities for beneficiaries. To establish a trust, work with a legal professional to create a trust deed, then apply for an ABN and TFN for the trust.

When deciding on a business structure, consider factors such as control, financial risk, tools and equipment, delegation of work, working hours, and the expectation of ongoing work. These factors will help you classify your work status correctly and avoid penalties and fines. Additionally, consult with an accountant or bookkeeper to choose the most suitable structure for your specific circumstances.

Registering your business

To work as an independent contractor in Australia, you can operate as a sole trader or incorporate a legal entity—whichever best suits your needs.

Sole trader

The sole trader or proprietor model is ideal for individual, independent contractors who intend to be sole owners (although you can still legally employ staff if required). You have full control of the enterprise. Although there is no legal separation between you (the owner) and the business, you are personally responsible for all its debts and liabilities.

To register as a sole trader, you need to:

• Register a business name with Australia’s Business Registration Service (BRS) for a small fee.
• Apply for an Australian Business Number (ABN). You can register for an ABN online for free—all you need is proof of identity, some basic details about your business, and your business structure.

Incorporate a legal entity

If you’re looking to incorporate, you can set up one of the following business structures:

• Partnership: A legal entity composed of two (or more) partners. Income and losses are distributed between you and your partners.
• Company: A legal entity that is separate from you, the individual. It must include a minimum of one shareholder and one director. All income and losses are attributed to the company as opposed to you personally.
• Trust: A specialist structure whereby a trustee manages the business and all of its activities for beneficiaries.

Useful tip

If you’re unsure which structure is right for you or how to register your business, the BRS has a handy “Help Me Decide” tool that can provide guidance and advice. You can find more guidance on how to register your business on the BRS portal.

Importance of registering a business name and having an ABN

• Communication and invoicing: You must list your business name on all your communications and invoices. This makes your business more credible and conveys professionalism, making clients more likely to trust and hire you. Without an ABN, you can’t issue invoices or legally receive payments.
• Goods and services tax (GST): If your annual income exceeds $75,000, then you need an ABN to register for GST to claim GST credits.
• Avoid withholding tax: Without an ABN, your clients must withhold 47% of your payments as tax. Having an ABN avoids this and allows you to receive full payment.

Networking with insurance companies

Networking is pivotal to becoming a preferred contractor for insurance companies. Here are some tips to help you build a strong network and foster meaningful relationships with insurance professionals:

• Participate in industry events: Get yourself out there by attending conferences, workshops, trade shows, and other industry events. These gatherings provide excellent opportunities to connect with insurance agents, adjusters, and other decision-makers. The more people you meet, the more you can expand your network.
• Join professional associations: Become a member of professional associations that cater to insurance professionals. These platforms offer valuable networking opportunities and give you access to industry-specific resources. By joining, you can stay informed about industry trends and developments while also making valuable connections.
• Foster relationships with insurance adjusters: Building relationships with insurance adjusters is crucial. These professionals often have a list of preferred contractors they recommend to their clients. Getting on their radar and developing a good rapport can increase your chances of being recommended and, ultimately, landing more jobs.
• Be proactive: Don't wait for opportunities to come to you—be proactive in your networking efforts. Seek out events and platforms where you can meet insurance professionals. Demonstrate your expertise, reliability, and commitment to excellence. This will help position your business as a top choice for insurance restoration jobs and other contracting needs.
• Utilize lead generation companies: Partnering with a lead generation company can boost your visibility among insurance companies. These companies specialize in connecting contractors with insurance providers, so they can help streamline the process of finding insurance work.
• Provide exceptional customer service: Focus on delivering exceptional customer service. Understand your clients' needs and expectations, and strive to exceed them. Encourage satisfied customers to leave positive reviews and testimonials, as these will enhance your reputation and credibility with insurance companies.
• Understand the insurance system: Familiarize yourself with insurance policies, terms, and conditions. Develop efficient procedures for handling insurance paperwork, including estimates, invoices, and documentation. Show that you can be responsive and adaptable to each insurance company's specific requirements and procedures. This flexibility and commitment to their processes will be valued.

Frequently asked questions