Subcontracting offers power and electrical engineers the flexibility to work across diverse projects, but it also brings heightened responsibility. Unlike larger firms, subcontractors often shoulder contractual and financial risks directly.
Over the past decade, subcontracting has become a far more common business practice, as companies look for flexible ways to resource projects without maintaining large permanent teams. In today’s soft insurance market – where premiums are falling and insurers are competing hard for business – it’s easy to assume that cheaper cover is good enough. The reality is more complex.
Why insurance matters when subcontracting
When you sign contracts as a subcontractor, you may be liable for liabilities or damages in ways that aren’t always obvious at first glance. Insurance isn’t just a contract requirement – it’s the safeguard that protects your livelihood, reputation and long term career.
“Too often subcontractors take on contracts without fully realising the risks they’re assuming. Having the right insurance in place is not just a formality – it’s the safeguard that protects your livelihood when something goes wrong.”
Maria Vidic, Broking Operations Manager, EngInsure
How subcontracting is reshaping the industry
Subcontracting has moved from being an occasional pathway to a core part of the industry model. Companies now show far greater appetite for engaging subcontractors – reshaping business practices and the way projects are delivered.
For power and electrical engineers, this shift has meant fewer permanent roles and more project-based opportunities. The upside is flexibility and exposure to diverse work, but the trade-off is that individual engineers carry more of the responsibility – from financial management to risk oversight.
Understanding this new employment landscape is key, because the rise of subcontracting has expanded both opportunities and exposures, making robust insurance protection more critical than ever.
Key risks in the industry
Power and electrical engineers face some of the most high stakes exposures in engineering:
- Design risks Errors in design or specification can lead to costly rectification or consequential loss
- Safety risks Working with live systems and infrastructure creates hazards for both workers and the public
- Contractual risks Many head contracts transfer responsibility for delays or defects directly onto subcontractors
- Industry risks Reliability and safety standards are under close scrutiny, amplifying the impact of even small lapses
The current market: Pitfalls hidden behind cheaper premiums
The insurance market is soft right now, with increased insurer appetite and lower premiums. While that may seem like a win, subcontractors should be cautious:
- Some policies are cut back, leaving dangerous gaps in cover
- Low-cost options often come with restrictive clauses and exclusions
- Insurers that flood into the market may also withdraw quickly when conditions change
Cheaper doesn’t always mean safer. Choosing the lowest-priced cover without expert advice can leave you exposed when you need protection most.
Insurance essentials for subcontractors
Some of the key insurances every subcontracting power engineer should consider include:
- Professional indemnity Cover for claims of errors, omissions or professional negligence
- Public liability Protection against injury to third parties or property damage caused by physical work
- Contract works Cover for loss or damage to work in progress
- Business pack Safeguards for your tools, equipment and office
- Cyber insurance Growing protection need for engineers managing sensitive digital systems
Building a resilient career
For subcontracting power and electrical engineers, the right insurance is more than a safety requirement – it’s the foundation for a sustainable career. With the right cover, you can take on projects confidently, knowing you’re protected against the risks of today’s market and beyond.
Talk to an EngInsure adviser
At EngInsure, we specialise in insurance and risk advice tailored to engineers. If you’re subcontracting in the power and electrical sector, we can help you understand your risks and secure cover that protects your business.
Protect your business – speak with an EngInsure adviser today.
The contained information is general advice only. It is not intended to take the place of professional advice. Before acting on this information you should consider the appropriateness of this advice to your particular objectives, needs and financial objectives. Contact Whitbread Associates Pty Ltd | ABN 69 005 490 228 | License Number 229092 trading as EngInsure Insurance & Risk Services for further information or refer to our website.