Insurance is one of those jobs that gets put off until a builder asks for your certificate of currency on a Friday afternoon. Then you buy whatever comes up first, at whatever limit, and hope it’s right.
This guide explains the main types of cover Australian tradies deal with, what each one actually pays for, and the gaps people find out about too late. It’s general information only. Policy wordings differ a lot between insurers, so read the product disclosure statement (PDS) for anything you buy, or get a licensed broker to do it with you.
Public liability: the one you’ll be asked for
Public liability insurance covers your legal liability if your work injures someone or damages their property. Think of a customer tripping over your extension lead, a ladder going through a window, or a water leak after you’ve worked on a pipe that wrecks the floor below.
It usually pays for compensation and legal costs, up to your limit of cover. For tradies it’s often sold as public and products liability, which also covers claims arising from products you supply or install.
What public liability doesn’t cover
This is where people get caught out:
- Your own injuries. It covers other people, not you.
- Your own tools and equipment. That’s tools cover (below).
- Fixing your own faulty work. Policies usually cover the damage your work causes, not the cost of redoing the work itself. A leaking joint might be covered for the ruined ceiling, but not for replumbing the joint.
- Professional advice or design. If you design systems or give paid advice, that’s professional indemnity territory.
- Work outside what you declared. If you told the insurer you’re a carpenter and you do some roofing, you might not be covered for the roofing. Declare everything you actually do.
How much cover?
It’s common to see limits of $5 million, $10 million and $20 million. In practice the minimum is set by your clients. A builder or facilities manager will tell you what they require in their subcontractor paperwork. Commercial and government sites often want more than domestic work. Ask your regular clients before you buy, not after.
Our public liability guide goes into limits, exclusions and the Victorian licence requirements for plumbers and electrical contractors.
Tools and portable equipment cover
If your tools live in the ute, you know the risk. A lot of tradies have a story about a smashed window and an empty toolbox.
Tools cover (sometimes called portable equipment or general property cover) pays to repair or replace your gear if it’s stolen or damaged. The details matter more here than with almost any other cover:
- Theft from vehicles. Many policies only pay for theft from a vehicle if there’s evidence of forced entry, and some have conditions about overnight storage or the tools being out of sight in a locked compartment. Check exactly what your policy says about utes, canopies and toolboxes.
- Specified vs unspecified items. Higher-value items like laser levels or diagnostic gear may need to be listed individually. Unspecified items often have a per-item limit.
- Replacement or indemnity value. Some policies pay what it costs to buy new, others pay what the item was worth on the day, which is less for older gear.
- Excess. A high excess makes the premium cheaper, but small claims become pointless.
Keep receipts and serial numbers, and take photos of your gear once a year. It makes any claim much quicker, and it helps police if gear turns up. Our tools insurance guide goes through theft from utes, exclusions and claims in detail.
Income cover: protecting your pay
This is a gap many new sole traders don’t know about. As a sole trader you are generally not covered by state workers compensation, because those schemes cover employees, not the self-employed. If you do your back in or break a wrist, nobody pays you while you’re off.
There are two main options.
Personal accident and illness insurance
Often sold alongside business insurance (BizCover lists it, for example), personal accident and illness cover pays a weekly benefit if injury or illness stops you working. Applications are often simpler than for income protection. Benefit periods are often shorter, there are waiting periods, and limits apply. The PDS sets out how long it pays for and how much.
Income protection insurance
Income protection, usually bought through a life insurer, adviser or your super fund, typically pays a percentage of your income for longer benefit periods. Underwriting is more involved and tradies in physical jobs can pay more.
The ATO says income protection premiums paid outside super are generally tax deductible. Premiums paid through super are not deductible to you, and life, trauma and TPD cover are not deductible either. If a policy bundles these, only the income protection part counts.
For a closer look at waiting periods, benefit periods, tax and super, see our guide to income protection vs personal accident insurance.
Queensland’s workers comp option
Queensland is different. WorkCover Queensland offers an optional workplace personal injury insurance policy for eligible self-employed people. It covers work-related injury only, not illness or injuries outside work, so it isn’t a replacement for income protection.
Other types of business cover
- Commercial vehicle insurance. Make sure your ute or van is insured for business use, and check what happens to the gear and fit-out inside it.
- Professional indemnity. Relevant if you do design work, sign off on systems or give paid advice.
- Contract works insurance. Covers the work itself while it’s under construction, usually for builders and larger renovators.
- Home warranty or domestic building insurance. Builders doing residential work above state thresholds must arrange this for the homeowner. Rules differ by state, and Victoria’s scheme changed on 1 July 2026. See our guide to checking a tradie for the thresholds.
- Business insurance packs. These bundle cover such as property, theft and business interruption. Useful if you have a workshop or yard.
How to buy: broker or online?
You have two main routes.
A licensed insurance broker holds an AFS licence (or is authorised under one), can give advice about your risks, arranges cover across insurers and can help at claim time. Brokers are paid through commission, fees or both, and must tell you how.
An online quote service such as BizCover shows quotes from several insurers and lets you buy online. BizCover says it insures over 320,000 small businesses and lets you pay monthly or annually. Online services generally don’t consider your personal circumstances, the quotes depend on the information you enter, and you choose the cover and limits yourself. Describe your work accurately and read the PDS and TMD. We haven’t compared BizCover’s prices against brokers, and we’re not saying it’s the right option for you.
See BizCover quotes Affiliate link. We may be paid a commission if you buy. Not a recommendation of any policy: read the PDS and TMD first.
A quick checklist before you buy
- List every type of work you actually do, including the odd jobs.
- Ask your regular builders and clients what public liability limit they require.
- Add up what your tools would cost to replace, and note the items worth more than about $1,000.
- Check where your tools sleep at night, and whether the policy covers that.
- Work out how long you could go without income, and read how personal accident and income protection policies handle waiting and benefit periods.
- If you have staff, sort workers compensation first. It’s the law.
- Read the exclusions in the PDS, not just the summary.
- Put renewal dates in your calendar. A lapsed policy is the same as no policy.
Watch out for these mistakes
- Underinsuring tools. Gear builds up over the years. Review the total every renewal.
- Not updating your occupation. If you add a new type of work, tell your insurer.
- Assuming the builder’s insurance covers you. Head contractor policies generally don’t cover subcontractors’ own liability.
- Buying on price alone. A cheap policy with a narrow theft clause is no good when the ute gets done.
Insurance is a business cost like fuel and tools, and it belongs in your pricing. If you’re just starting out, our guide to setting up as a sole trader tradie covers where insurance fits alongside your ABN, GST and BAS.
Common questions
Is public liability insurance compulsory for tradies?
It depends on your trade and state. Some licensing schemes require it, and many builders, councils, strata managers and commercial sites require it before you can start work. Even where it's not required by law, working without it means you carry the full cost of any claim yourself.
How much public liability cover do I need?
It's common to be asked for $5 million, $10 million or $20 million of cover. Check what your regular clients and head contractors require, because their contracts set the minimum in practice. Domestic-only work often starts at the lower end, commercial work tends to need more.
Does public liability cover my own tools?
No. Public liability covers your legal liability to other people for injury or property damage. Your own tools need separate tools or portable equipment cover.
Am I covered by WorkCover as a sole trader?
Usually not. State workers compensation schemes cover employees, not self-employed sole traders. Queensland is an exception of sorts: WorkCover Queensland offers an optional workplace personal injury policy for eligible self-employed people. If you employ staff, workers compensation for them is compulsory.
Can I claim insurance premiums on tax?
Premiums for business insurance such as public liability and tools cover are generally a deductible business expense. The ATO says income protection premiums paid outside super are generally deductible too, but life, trauma and TPD cover are not. Check your situation with a registered tax agent.
