Mining is an industry with many challenges and risks, which can lead to errors of judgement. When these errors occur, a suitable mining insurance policy can protect you and your business against damages. These damages can be anything from injuries to property damage due to natural catastrophes, accidents, financial issues, and transportation hazards.
Do You Need Mining Insurance?
The mining industry continues to grow, despite the pandemic. Western Australia reached a record increase in sales in 2021-22, garnering over $231 billion for minerals and petroleum. Iron ore is also unstoppable, as WA retains its position as the largest supplier in the world. As the growth continues, so do the risks. That’s why we’re seeing a consistent rise in insurance needs.
But does your business require mining insurance? If you employ any of the following, the simple answer is “yes”:
- Civil Contractors
- Crushing and Screening Contractors
- Drilling Contractors
- Exploration and Mining Contractors
- Project Managers and Consultants
- Quarry and Mining Contractors
- Survey Contractors
If you break down the components of a mining site, you can see that many different parts are at work. Along with each operation comes an increased chance of a mishap. That’s why everyone, from miners to contractors to traders to financiers, will surely benefit from having the right mining insurance coverage.
Types of Mining Insurance
Due to the wide range of risks your mining business can face, it’s essential to have suitable insurance coverage ready. Here is a list of the most critical mining insurance types that you should know about:
1. Workers Compensation Insurance
This type of mining insurance provides a safety net if an employee is injured or gets sick because of work. Australian law dictates that employers should have insurance to cover injuries or illnesses brought about by mining tasks. This financial support enables you to focus on other matters whilst your sick or injured employee recovers. You don’t have to worry about treatment and rehabilitation costs, as they are primarily covered by workers’ compensation insurance. It may also cover the following:
- Employee’s wages
- Medical and hospital bills
- Funeral expenses
- Periodic payments for dependents in case of death
Some insurance policies provide a lump sum payment for permanent impairments and death.
2. Public Liability Insurance
Unlike workers comp, public liability insurance is not required by law. However, it helps cover your business against third-party claims, such as:
- Loss or damage caused by your business to a third-party property
- Injury or death of a third party
- Compensations you’re required to pay for a covered claim
- Incident investigation
- Legal costs incurred defending a claim
As a business owner, you bear the responsibility of caring for a third party – whether a customer, supplier or any public member – who comes into contact with your business and its operations.
3. Professional Indemnity Insurance
Geologists, engineers, supervisors, and other professionals working in your company may have several years of experience, but they can still make mistakes. Some blunders can cripple your business financially. That’s why you need Professional Indemnity Insurance, which others call Errors or Omissions.
This mining insurance type covers breach of duty or negligence claims against advice or service arising from an error, omission, or act. It may also protect against other civil liabilities, such as unintentional defamation and infringement of intellectual property, as well as bodily injury and property damage relating to professional services covered by the policy.
4. Plant and Equipment Insurance
Mining plants and equipment are among your assets, which you should certainly protect. Traditional machinery typically allows replacements or repairs based on market value, regardless of age. If the plant and equipment used in mining are covered, you can quickly obtain a new machine in case of damage, loss, or vandalism.
5. Management Liability Insurance
With Management Liability, you can get a flexible cover that protects the owner and managers running the mining company. The industry is quite complex, with work health and safety and employment laws to follow. But despite your best intentions, unintentional violations of legislation and compliance can occur. Stakeholder expectations can be mishandled and unfulfilled, exposing liability to managers and company directors.
Every business risk management strategy requires management liability insurance to protect against claims that may incur fines and penalties. It can also cover personal liability and employment practice claims.
6. Contract Works Insurance
Mining is a contract-driven industry, so a contract works cover is undoubtedly essential. This type of insurance is similar to public liability, except that it covers contractors for all mining activities, even after the workers have left the site.
Some risks, such as fire, theft, flood, and storm, are outside your control. With this insurance, you can be protected against claims that a contractor or project manager/owner may file, such as physical loss or damage to the mining project.
Which Type of Mining Insurance Do You Need?
The answer to the question above depends on the work you’re undertaking. For instance, public liability insurance covers most of your requirements if you are a contractor providing your labour. Meanwhile, professional indemnity should be part of your insurance lineup if you offer advice for mining businesses or projects.
A larger business, especially one with several employees and equipment used on-site, will benefit from a combination of professional indemnity, public liability, and other covers. Make sure to take into account the project details and specific tasks, along with the machinery and equipment onsite. Usually, contract works insurance, plant and equipment insurance, and workers’ compensation insurance can provide cover and protection for most claims.
Find the Suitable Mining Insurance for You
If an injury or accident occurs onsite, you need an insurance policy for that specific situation. It’s a vital step to take to keep your business safe against financially devastating claims. Policies are unique and can be customised according to your needs. However, they usually cover the costs of investigations, treatments and therapies, and settlement.
Due to several types of insurance, many mining companies need help knowing where to begin. Here at Grace Insurance, we can help you understand the type of mining insurance coverage you need to protect your business, staff, investment, and reputation. Allow us to give you tailored information by contacting us today.