Insurance feels like a waste of money — until you need it. One customer trips over a cable on your site and you're looking at a $200,000 claim. One back injury and you're off the tools for six months with no income. Here's what you actually need, what it costs, and what you can probably leave.
Public liability — the non-negotiable
Public liability insurance covers claims when your work causes property damage or personal injury to a third party. A customer's floor gets damaged during a plumbing job. A passerby trips on your equipment. A fitting fails and causes a flood. That is all public liability territory.
Technically it is not legally required for most trades, but practically it is mandatory. Every professional builder, site manager, and commercial client will ask for your Certificate of Currency before you start. The standard minimum is $5 million cover. Some commercial and government jobs require $10M or $20M.
Workers compensation — legally required
The moment you employ anyone — full-time, part-time, casual, or apprentice — you must hold workers compensation insurance. This is a legal requirement in every Australian state and territory, no exceptions. It covers the cost of medical treatment, rehabilitation, and lost wages if an employee is injured at work.
Operating without it can result in severe financial penalties (up to $55,000 in some states) and you become personally liable for the full cost of any workplace injury. For a serious back or shoulder injury, that can easily exceed $500,000 over a lifetime.
- Cost: premiums are a percentage of your wages bill, set by your state regulator and your industry classification. Trade businesses typically pay 3–8% of wages.
- Where to get it: through your state's insurer (iCare in NSW, WorkSafe in VIC, WorkCover QLD) or an approved private insurer, depending on the state.
- Important: workers comp does not cover you as a sole trader or business owner. You need separate income protection for yourself.
Income protection — for you
As a sole trader or business owner, you don't get sick leave. If you fall off a ladder and can't work for three months, your income drops to zero while your bills stay the same. Income protection insurance (also called personal accident and sickness cover) pays you a weekly benefit — usually 75% of your pre-disability income — while you recover.
This is the insurance most tradies skip and most wish they had when something goes wrong. A decent policy costs $800–$2,500 per year depending on your age, trade, and the benefit period. It is also tax-deductible.
Tools and equipment cover
If your tools are worth more than you can comfortably replace out of pocket — and for most tradies, a full kit is $10,000–$30,000 — insure them. Tool insurance covers theft, loss, and accidental damage.
Read the fine print. Some policies exclude tools left in an unlocked vehicle. Some require a specific type of toolbox or vehicle lock. Some don't cover tools on a job site, only in transit or at home. Make sure your policy matches how you actually store and transport your gear.
Professional indemnity — only sometimes
Professional indemnity covers you if your professional advice or design work causes a financial loss to a client. If you are a plumber who installs pipes, you probably don't need it. If you are a plumber who designs hydraulic systems and signs off on specifications, you probably do. It covers the gap that public liability doesn't — errors in your professional judgement rather than physical damage from your work.
Bundling saves money
Most trade insurers offer "trade packs" that combine public liability, tool cover, and personal accident into one policy. These are almost always cheaper than buying three separate policies. Get quotes both ways, but in practice the bundle wins.
What you can probably skip
- Cyber insurance — unless you store significant customer payment data (most tradies don't).
- Management liability — relevant for larger businesses with boards and directors, overkill for a sole trader or small team.
- Product liability — you are not manufacturing products. Public liability covers damage caused by your installation work.
Frequently asked questions
Not by law in most cases, but it is a practical requirement. Almost every builder, developer, and commercial client will require a Certificate of Currency with at least $5 million cover before you set foot on a site. Without it, you are locked out of most professional work.
Generally $300 to $1,500 per year for $5 million cover, depending on your trade, turnover, location, and claims history. Higher-risk trades like roofers and electricians pay more. It is one of the cheapest insurances relative to the protection it provides.
Yes. Workers compensation insurance is a legal requirement in every Australian state and territory the moment you employ anyone — full-time, part-time, casual, or apprentice. No exceptions. Failing to hold it can result in severe penalties and personal liability for the full cost of any injury.
Yes, but check the policy details carefully. Some tool insurance policies have strict security requirements — for example, tools must be in a locked toolbox or locked vehicle, and some exclude overnight vehicle storage entirely. Make sure the policy covers tools in transit and on site, not just at home.
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Admin Substitute stores your Certificates of Currency, expiry dates, and policy details alongside your jobs and quotes — so you never scramble to find them when a builder asks.
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