Compare business insurance for your small business
Business insurance is a set of covers, not one policy. Most small businesses need public liability, cover for their premises, stock or tools, and workers compensation as soon as they employ anyone, which is compulsory in every state. Add professional indemnity if you're paid for advice, and cover for yourself if you're a sole trader.
This guide sets out what each cover pays for, which are compulsory, how premiums are set and how to compare quotes like for like, with a detailed page for every cover and every state's workers compensation scheme.
By Better Rate Mate Editorial Team · Last reviewed
What the law requires
- Workers compensation if you employ workers, under your state's scheme
- CTP on every registered vehicle
- Professional indemnity for some professions, such as tax agents and registered health practitioners
- Public liability for certain occupations in some states
Source: business.gov.au, Types of business insurance.
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Cover and situation guides
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State workers comp schemes explained
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States where workers comp covers sole traders
The types of business insurance, and who needs each
Insurers sell business cover as separate policies or bundled into a business package. Either way, each cover responds to a different kind of loss, and a gap in one isn't filled by another: public liability won't pay your injured employee, and workers comp won't pay a customer who slips.
Work through the table with two questions. What would stop the business trading, and what could someone claim from you? The answers point to the covers that matter.
| Cover | What it pays for | Who typically needs it | Compulsory? |
|---|---|---|---|
| Public liability | Injury to other people, or damage to their property, caused by your negligence in running the business | Any business dealing with customers, the public or other people's premises | For certain occupations in some states; often required by councils, contracts and leases |
| Professional indemnity | A client's financial loss caused by your advice or professional service | Consultants, advisers, accountants, designers, IT and health professionals | For some professions, by law or registration |
| Workers compensation | Your workers' wages and medical costs after a work injury or illness | Every business with employees | Yes, for employers, under each state's scheme |
| Product liability | Injury or damage caused by goods you make, import, sell or install | Manufacturers, importers, retailers, online sellers, installers | No; often a retailer or marketplace condition |
| Management liability | Claims against directors and the company, employment disputes, regulatory investigations and employee theft | Companies with staff, not-for-profit boards | No |
| Cyber | Response, recovery, lost income and liability after a hack, ransomware or data breach | Businesses that trade online or hold customer data | No |
| Business property and contents | Damage to or theft of premises, stock, fit-out and equipment | Businesses with premises, stock or equipment | No; often a lease or lender condition |
| Business interruption | Lost profit and ongoing costs while you can't trade after insured damage | Any business that couldn't trade for weeks after a fire or flood | No |
| Tools and portable equipment | Theft of or damage to tools and equipment away from the premises | Tradies and mobile workers | No |
| Commercial motor and CTP | Damage to work vehicles and other people's property; CTP covers injury to people | Businesses using vehicles | CTP is compulsory with registration |
| Personal accident and illness | A benefit for the owner if injury or illness stops them working | Sole traders and working owners, who aren't covered by workers comp | No |
Covers by type of business
If you're not sure where to start, begin with the covers businesses like yours usually need, then add what your contracts and premises require.
| Business | Covers to look at first | Guides |
|---|---|---|
| Trades and construction | Public liability, tools and equipment, workers compensation once you employ anyone, and home warranty insurance for residential building work above each state's threshold | Tradie insurance; builders insurance |
| Retail and hospitality | Public and products liability, business property and contents, business interruption, workers compensation | Public liability; product liability |
| Professional services | Professional indemnity (compulsory for some professions), public liability for visitors, cyber, and management liability for companies | Professional indemnity; cyber insurance |
| Online sellers | Product liability, especially if you import directly; cyber; cover for stock | Product liability; cyber insurance |
| Home-based and solo businesses | Public liability if clients visit or you work at their premises, PI if you advise, and cover for yourself, because workers comp doesn't cover a sole trader | Sole trader insurance |
Public liability
Public liability insurance: what it covers and how to compare it
Professional indemnity
Professional indemnity insurance: cover for advice and professional work
Workers compensation
Workers compensation insurance: how it works in every state
Product liability
Product liability insurance: cover for what you make, import and sell
Management liability
Management liability insurance: D&O, employment and statutory cover
Cyber insurance
Cyber insurance for small business: what it covers and what to check
Which business insurance is compulsory?
business.gov.au lists the insurance most commonly required by law: workers compensation if you have employees, CTP if you use motor vehicles, and public liability for certain occupations in some states and territories. It also notes professional indemnity is mandatory for some professions. Beyond the law, leases, contracts and permits often make other covers compulsory in practice.
Workers compensation: required for employers in every state
Each state and territory runs its own scheme, and the differences are real. In NSW and Victoria you're exempt only with $7,500 or less a year in wages and no apprentices (NSW also excludes businesses in a group). South Australia's registration threshold is $16,806 for 2026-27. Queensland, WA, Tasmania, the ACT and the NT require cover from the first worker, and Queensland gives you 5 business days to apply. Who provides the cover differs too: WorkCover Queensland is the only insurer in Queensland, while in WA, Tasmania, the ACT and the NT you choose among licensed private insurers.
Workers comp covers your employees, never the owner of an unincorporated business. If you're a sole trader or partner, no state's scheme covers your own injuries. Our guide to workers compensation insurance in every state compares the schemes, and each state page sets out its rules, premium method and official rates:
Professional indemnity: required for some professions
Registered health practitioners must not practise without appropriate professional indemnity arrangements, under the National Law and Ahpra's registration standards. The Tax Practitioners Board requires tax and BAS agents to hold PI that meets its minimums. Financial services and credit licensees, solicitors and registered migration agents have their own requirements. Theprofessional indemnity guidelists each one with its rule-setter.
Public liability: required by some laws, and many contracts
Public liability is required by law only for certain occupations in some states, but it is the cover most often demanded in practice. Councils make it a condition of permits (the City of Melbourne, for example, requires at least $20 million for a single claim for activities in its public spaces), head contractors write it into subcontracts and landlords into leases. Seepublic liability insurance for how limits and certificates of currency work.
Vehicles and residential building work
CTP is compulsory for every registered vehicle and is bought or paid with registration, depending on the state (see CTP in each state). Damage to a work vehicle, or by it to other people's property, needs motor cover, and insurers generally expect business use to be declared: see business car insurance. Builders doing residential work also need home warranty insurance in the states that require it; seebuilders and home warranty insurancefor each state's threshold, and the tradie insurance guidefor what that means for trades.
Insurance when you start a business
Most insurance decisions come with a milestone: a lease, a first employee, a first contract. Work through them as they happen rather than buying a package on day one.
- Registering an ABN: An ABN doesn't require any insurance by itself. Check whether your occupation needs a licence or registration that comes with an insurance rule, such as PI for tax agents and registered health practitioners.
- Signing a lease: Landlords and shopping centres usually set a minimum public liability limit in the lease and may ask to be noted on your policy.
- Hiring your first worker: Workers compensation becomes compulsory, apprentices included, and the deadlines are short: 5 business days in Queensland, 14 days in South Australia, and in NSW the policy can't be backdated, so have it before the first shift.
- Taking payments online or holding customer data: Look at cyber cover, and check whether the Notifiable Data Breaches scheme applies to you: it covers businesses with turnover over $3 million and some smaller ones.
- Signing your first client contract: Read the insurance clause before you sign: the limits it requires, a certificate of currency, and any principal's indemnity.
- Using a vehicle for work: CTP comes with registration; tell your motor insurer about business use.
- Working from home: Check your home and contents policy, because many limit or exclude business equipment and business use.
The detail is in each guide: the workers compensation guide for each state's deadline, cyber insurance for the data breach rules, and public liability insurancefor limits and certificates of currency.
Business insurance for tradies, builders and sole traders
Three groups have needs that don't fit the standard small business package. Tradies need cover that follows them from site to site, including tool insurance,builders insurance adds contract works and home warranty rules for residential work, and sole trader insurancehas to replace the income workers comp won't. Each guide sets out the full mix.
Tradies
Tradie insurance: the covers tradies actually need
Tradie insurance isn't a single policy.
Tool insurance
Tool insurance for tradies: the conditions that decide a claim
Tool insurance pays to repair or replace your tools and portable equipment if they're stolen or damaged, on site, in your ute or at home.
Builders
Builders insurance: the covers a building business needs, and home warranty by state
Builders insurance is the set of covers a building business carries, usually contract works, public liability, tools and workers compensation, plus the home warranty insurance a licensed builder must take out in the owner's name on residential jobs above each state's threshold.
Sole traders
Sole trader and self-employed insurance: public liability and the covers you need
Most sole traders don't need public liability insurance by law, but many can't work without it: clients, councils, landlords and head contractors usually ask for it and set the minimum limit, often $10 million or $20 million.
How to compare business insurance quotes
Business quotes are only comparable when everything except the insurer is the same. A cheaper quote can simply describe your business differently, carry a higher excess or leave out a section. Work through it in this order.
- Start with what's compulsory: workers compensation if you employ anyone, CTP for vehicles, and any PI or public liability your profession or state requires.
- Collect your contract requirements: the limits and wording your leases, subcontracts, permits and client agreements demand.
- Describe the business accurately: every activity you do, your turnover, wages and subcontractor spend.
- Choose limits and excesses and use the same on every quote.
- Decide package or separate policies, then compare like with like.
- Read the exclusions of the two cheapest for the risks specific to your work.
- For claims-made covers (professional indemnity, management liability, cyber), check the retroactive date carries over.
| Detail | Why it changes the price | What to check |
|---|---|---|
| Occupation or business description | The single biggest rating factor; insurers price each activity separately | It covers everything you actually do, including secondary work |
| Turnover and wages | Used to measure how much work, and how many people, the insurer is covering | The same honest figures on every quote |
| Limits | Higher limits cost more; contracts often set a minimum | Identical limits, and whether each is per claim or aggregate |
| Excess | A higher excess lowers the premium and raises what you pay at claim time | The same excess on each section |
| Sections included | A package may bundle covers you don't need, or leave out one you do | The same covers on every quote, or compare each cover separately |
| Key exclusions and conditions | Two policies at the same price can exclude very different things | Exclusions for your trade, tool theft conditions, security requirements |
| Claims-made details (PI, management liability, cyber) | Losing a retroactive date can remove cover for past work | The retroactive date and any run-off options |
The details that most often decide a claim are covered in each guide: limits and certificates of currency in public liability, retroactive dates and run-off in professional indemnity, the importer rule in product liability, the limits on insuring directors and fines in management liability, and security conditions in cyber insurance.
Insurers, brokers and comparison sites
You can buy business insurance directly from an insurer, through a broker, or via an online platform that arranges cover from several insurers. A broker can be worth it for a more complex business, because they can negotiate wording and place cover that isn't sold online. Whoever you use, ask which insurer actually underwrites the policy, and read the Product Disclosure Statement and Target Market Determination before you buy.
No comparison service, including this one, shows every policy on the market, and we don't rank insurers as "best". Better Rate Mate has no commercial arrangement with any insurer named on these pages; where we list insurers, such as the licensed workers compensation insurers in each state, we take the list from the regulator.
If a claim is refused and you disagree, complain to the insurer's internal dispute resolution team first. If that doesn't resolve it, check whether the Australian Financial Complaints Authority (AFCA), which provides free, independent dispute resolution, can take your complaint. Workers compensation matters are handled through each state's own scheme and regulator.
Business insurance FAQs
What does business insurance cover?
Business insurance is a group of covers rather than one policy. The main ones are public liability (injury or damage to others), professional indemnity (clients' losses from your advice), workers compensation (your staff's injuries), property and contents, business interruption, product liability, management liability and cyber. Most businesses need a few, not all.
What is the best insurance for a small business?
There's no single best policy or insurer. The right cover depends on what you do: a café needs public liability, contents and interruption cover; a consultant needs professional indemnity; any business with staff must have workers compensation. Start with what's compulsory, add what your contracts require, then cover the risks that would hurt most.
How much does small business insurance cost in Australia?
It depends on your occupation, turnover, wages, limits, excess and claims history, so prices vary widely between businesses. We don't publish average prices because they're drawn from one broker's customers and date quickly. The only official rates are workers comp scheme averages, such as 1.8% of remuneration in Victoria for 2026-27.
Is business insurance compulsory in Australia?
Workers compensation is compulsory for almost every employer. CTP is compulsory for registered vehicles. Professional indemnity is required for some professions, and public liability for certain occupations in some states. Other covers are optional in law but often required by leases, contracts and permits.
Do ABN holders need insurance?
An ABN doesn't in itself require any insurance. What you need depends on whether you employ anyone (workers comp), your profession (PI for some), your occupation and state (public liability for some), your vehicles (CTP) and the contracts you sign.
What insurance do I need if I am self-employed?
Usually public liability if you deal with the public or work on others' premises, professional indemnity if you're paid for advice or expertise, tools or equipment cover, and personal accident and illness or income protection, because workers comp doesn't cover self-employed people. Our guide to sole trader and self-employed insurance sets out each cover.
What business insurance is recommended for self-employed individuals?
Start with the covers your work exposes you to: public liability if you work with the public or on their premises, professional indemnity if you're paid for advice, and cover for your tools. Then cover yourself, because no state's workers comp covers a sole trader's own injuries. See sole trader and self-employed insurance.
How much does public liability insurance cost monthly?
There's no standard monthly price. Insurers set it from your occupation and exactly what you do, your turnover, the limit you choose, whether products liability is included, your staff, where you work, your claims history and the excess. Get quotes with identical details from several insurers; our public liability insurance guide explains what moves the price.
Is a business insurance package cheaper than separate policies?
Sometimes. Packages bundle common covers such as property, contents, interruption and liability, which can cost less than buying each alone. They can also include sections you don't need or have lower limits. Compare the package against separate policies with the same limits and excesses.
Is business insurance tax deductible?
The ATO lists insurance premiums, including public risk, professional indemnity, fire, burglary, motor vehicle, loss of profits and workers compensation, among the operating expenses a business can generally deduct. Check your situation with your accountant.
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