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Tradie insurance isn't a single policy. It's a package built around public liability, which head contractors, builders and many clients insist on before you start work, plus cover for your tools and equipment, your ute or van, workers compensation once you employ anyone (including an apprentice), and some form of income cover for you, because workers comp doesn't cover a sole trader's own injuries.
Only some of it is compulsory: CTP on a registered vehicle, workers compensation when you have workers, home warranty insurance for residential building work in the states that require it, and public liability for certain occupations in some states. The rest is optional in law but often required in practice, so the useful question is which covers your contracts, your clients and your own finances demand.
By Better Rate Mate Editorial Team ยท Last reviewed
Insurers sell these as a bundle or separately. The table shows what each cover is for, whether it is compulsory, and who usually needs it.
| Cover | What it pays for | Compulsory? | Who typically needs it |
|---|---|---|---|
| Public liability | Injury to other people and damage to their property caused by your work | Not by law in most cases, but usually a contract or site condition | Every tradie working on other people's property or sites |
| Products liability (completed work) | Injury or damage caused by work or goods after you have left the job | No | Plumbers, electricians, installers; usually bundled with public liability |
| Tools and portable equipment | Theft of or damage to tools and equipment, on site, in transit and at home | No | Anyone whose tools would be expensive to replace in a hurry |
| Commercial motor vehicle | Damage to your ute, van or truck and to other people's vehicles and property | No, but CTP is compulsory with registration | Anyone using a vehicle for work; business use must be declared |
| Workers compensation | Your workers' wages and medical costs after a work injury | Yes, once you employ workers (state rules) | Tradies with employees or apprentices, and some who use subcontractors |
| Personal accident and illness, or income protection | A benefit for you if injury or illness stops you working | No | Sole traders and working owners, who are not covered by workers comp |
| Contract works | Damage to the building work itself during construction | Sometimes a contract condition | Builders and trades carrying the risk of the works |
| Home warranty insurance | Protects homeowners if residential building work is defective or incomplete | Yes, for residential work in states that require it | Licensed builders and trade contractors doing residential jobs |
| Professional indemnity | Claims that your design, advice or certification caused a loss | Not for most trades | Trades that design systems or give paid advice |
For most tradies, public liability insurance is the cover you'll be asked to prove before you're let on a site. Builders and head contractors commonly write a minimum limit into their subcontract agreements, often $10 million or $20 million, and ask for a certificate of currency showing the policy is active. Some also ask to be noted on your policy as an interested party, or for a principal's indemnity extension that lets the policy respond to claims against them arising from your work.
Read the exclusions that bite on trade work. Common ones include damage to property you are working on (sometimes called care, custody and control), the cost of fixing your own faulty workmanship, work above a set height or below a set depth, hot work such as welding and cutting without precautions, damage to underground services, and anything involving asbestos. If your trade regularly involves any of these, look for a policy that covers it, or at least check its exclusion wording and any conditions.
Tools cover (often called portable equipment, general property or tools of trade cover) pays to repair or replace tools and equipment that are stolen or damaged, anywhere in Australia. Your home contents policy is usually not a substitute: many limit or exclude business tools, and cover at home rarely extends to a job site.
The value of a tools policy is in its conditions. Theft from an unattended vehicle is the most common tool claim, and many policies only pay if there are visible signs of forced entry, if the tools were out of sight in a locked vehicle or lockbox, or if the theft didn't happen overnight in the street. Check whether items above a set value must be listed individually, whether the payout is new-for-old or indemnity (depreciated) value, and whether hired or borrowed equipment is covered.
A personal car insurance policy may not cover a vehicle used mainly for work, and insurers generally expect business use to be declared. Commercial motor policies are built for that use, and some cover signwriting, racking and fixed equipment. Tools inside the vehicle are usually not covered by a motor policy, so they need their own cover. CTP insurance, which covers injury to people, comes with registration and is separate again: see CTP in each state.
The moment you employ someone, including an apprentice or casual labourer, you must have workers compensation cover under your state's scheme. Some states set a low wage threshold before a policy is needed, but apprentices and trainees are commonly caught regardless of wages. Check the rules for your state's workers compensation scheme.
Subcontractors are the grey area in the trades. Every scheme has tests for whether a contractor is really a worker in law, and a subcontractor who supplies only their labour, works under your direction and is paid by the hour can be a deemed worker for workers comp even with an ABN. If that happens and you have no policy, the premium you should have paid can come back to you, along with penalties.
If you are a sole trader or working partner, workers compensation doesn't cover your own injuries, in any state. A broken wrist or a back injury can stop your income overnight while the loan repayments, rego and insurance keep coming.
Two products fill the gap. Personal accident and illness insurance is a general insurance product that pays a weekly benefit for a limited period after an injury or illness, and is often sold alongside tradie packages. Income protection insurance is a life insurance product that replaces part of your income for longer benefit periods, with more complex underwriting. Compare waiting periods, benefit periods and how each defines being unable to work.
Tradie premiums are driven by your trade, your turnover and what you do on site. Give every insurer identical details:
At minimum, most tradies hold public liability (usually required by head contractors and clients) and cover for their tools. Workers compensation is compulsory once you employ anyone, CTP comes with vehicle registration, and residential builders need home warranty insurance where the state requires it. Personal accident or income protection covers you, because workers comp doesn't cover sole traders.
No. Public liability is the main part of it, but "tradie insurance" usually means a package that also includes tools cover and sometimes vehicle, personal accident and products liability cover. Public liability alone won't pay to replace stolen tools or cover you if you're injured.
In most cases no law requires it, but builders, head contractors, councils and many commercial clients make it a condition of work, and some state licensing schemes require it for particular licences. In practice most tradies can't get work on commercial sites without it.
It depends on your trade, turnover, number of workers, the public liability limit, the value of your tools, your claims history and the excess. Higher-risk trades such as roofing and electrical work generally cost more than lower-risk ones. Compare quotes with identical trade descriptions, limits and excesses to see the real difference.
Usually not, or only up to a small limit for personal items. Tools of trade generally need their own cover under a tools, portable equipment or general property policy. Check your motor policy's contents limit and exclusions.
Yes. An apprentice is an employee, so you must hold workers compensation cover under your state's scheme. Apprentices and trainees are often covered by the rules even where a small-wages exemption would otherwise apply.
The ATO lists public liability, workers compensation, motor vehicle and similar business insurance premiums among the operating expenses a business can generally deduct. Personal cover such as income protection has its own rules. Check with your accountant.
This page explains how tradie insurance generally works. It is not advice about your business or any particular policy. Licensing and compulsory insurance rules differ by state and trade, so check with your state's building or licensing regulator, and read the Product Disclosure Statement before you buy.
