Insurance Checklist: What Every Australian Tradie Actually Needs

Australian tradies need at minimum: public liability insurance, tools and equipment cover, commercial vehicle insurance, and personal accident or income protection. Public liability is legally required to hold a licence in most states and territories, and sites will knock you back without it. The others aren't always mandatory, but you'll feel their absence if something goes wrong.

The Core Four: What Almost Every Tradie Needs

These aren't nice-to-haves. They're the policies that keep your business running when things go sideways.

1. Public Liability Insurance

This is the one you can't work without. Public liability covers you if your work causes injury to someone else or damages their property. Say you're doing a bathroom reno and you crack a client's vanity, or a tile falls off the wall three months after the job is done. Public liability is what pays for it.

Most commercial sites and builders will ask for proof of public liability before they let you on. Many state licensing bodies require it too. Electricians in almost every state need it to hold a contractor licence. Plumbers in Victoria and Tasmania can't get licensed without it. The standard cover level most sites accept is $10 million, though some government or commercial contracts push that to $20 million.

For a sole trader in a lower-risk trade like painting or carpentry, expect to pay around $500 to $800 a year for $10M cover. Higher-risk trades, including scaffolders, demolition crews, and earthmovers, pay more, sometimes $1,500 or above. The jump from $10M to $20M usually adds 30 to 50% to your premium, not double.

2. Tools and Equipment Insurance

Tool theft costs Australian tradies more than $81 million a year. The back of your ute is a target. So is a job site overnight. And your home contents policy almost certainly won't cover business tools, so don't assume it will.

Tools insurance covers the cost of replacing or repairing your gear if it's stolen, damaged in a fire, or lost on the way to a job. Some policies only cover theft if there's evidence of forced entry into a locked vehicle. Read the fine print on that, because "I left the ute unlocked for 20 minutes" claims do get rejected.

Most tradies pay between $300 and $700 a year depending on the total value of gear they're insuring. If you've got $30,000 in tools in your van, spending $500 a year to protect that is a no-brainer.

3. Commercial Vehicle Insurance

Your ute or van is a work vehicle, not a personal one. Personal car insurance usually won't cover you if you're using the vehicle for business and you have an at-fault accident. You need commercial motor cover.

At minimum, you need Compulsory Third Party (CTP) insurance, which is registered with your vehicle and covers injuries to other people. But CTP doesn't cover damage to vehicles or property. Comprehensive commercial vehicle cover adds that, and also covers damage to your own vehicle, theft, and your fitted accessories like racks, drawers, and custom trays.

Premiums vary a lot based on the vehicle, how far you drive, your claims history, and whether employees drive it too. A sole trader with a standard ute might pay $1,200 to $2,000 a year for comprehensive cover.

4. Personal Accident and Illness Insurance

If you're a sole trader or subcontractor, you're not covered by workers' compensation when you get hurt. That scheme is for employees. You get injured, you stop earning. Simple as that.

Personal accident and illness insurance fills that gap. It pays a weekly benefit, usually up to 85% of your income, while you're off the tools. Some policies also pay a lump sum for serious injuries or death. The average construction injury keeps a tradie out of work for six or more weeks. If you're self-employed with a mortgage and bills, that's a problem without a policy to back you up.

Premiums typically run between $1,000 and $2,500 a year for a sole trader, depending on your income, the waiting period before payments kick in, and how long the benefit runs. A 30-day waiting period costs less than a 7-day one. A 2-year benefit period costs less than one that runs to age 65.

The Ones That Depend on Your Situation

These policies matter a lot for some tradies and are irrelevant for others.

Workers' Compensation

If you have employees, including apprentices, you need workers' compensation. Full stop. Every state runs its own scheme and fines for non-compliance are serious. In NSW, you're looking at up to $55,000. In QLD, penalties are similar. You're required to register once you start paying wages above the threshold in your state.

One thing to watch: if a subcontractor works exclusively for you and doesn't run an independent business, some states may classify them as a worker under your scheme. It's worth checking your obligations with WorkSafe or your state equivalent if you rely heavily on subbies.

Professional Indemnity Insurance

Professional indemnity (PI) covers you if a client claims your advice or professional services caused them financial loss. It's not just for architects and engineers. From 1 July 2026, registered building practitioners in NSW are legally required to hold PI insurance under the Design and Building Practitioners Act. VIC has similar requirements for certain building designers and plumbers. QLD building designers need it too.

If you're a registered practitioner in any state, check your licensing body's current requirements. These rules have been changing fast and what applied two years ago may not reflect your obligations today.

Contract Works Insurance

Builders running residential or commercial projects usually need contract works insurance. It covers the physical structure under construction against damage from fire, storm, vandalism, and similar events. If you're a subcontractor on someone else's site, the principal contractor or builder may already carry this. But confirm it in writing before you assume you're covered.

Home Warranty Insurance

Residential builders need home warranty insurance (also called domestic building insurance) once contract values hit certain thresholds. In NSW and WA that threshold is $20,000. In QLD it's $3,300. In VIC it's $16,000. This isn't optional. It's a condition of your licence and your contract. It protects the homeowner if you can't finish the job or if serious defects show up after the build.

Plant and Equipment Insurance

A portable tools policy covers the hand tools in your van. Once you move up to excavators, concrete pumps, forklifts, or scissor lifts, you need plant and machinery insurance. These are higher-value assets and the risk profile is completely different. Your tools policy won't pay out on a $180,000 excavator.

What to Expect to Pay

These are ballpark figures for sole traders. Premiums shift based on your trade, turnover, state, claims history, and whether you use subcontractors.

Cover Type	Annual Cost (Sole Trader)	Notes
Public Liability ($10M)	$500 to $1,800	Lower for painters and carpenters, higher for scaffolders and demolition
Tools and Equipment	$300 to $700	Depends on total value of gear insured
Commercial Vehicle (Comprehensive)	$1,200 to $2,500	Higher for expensive or modified vehicles, or multiple drivers
Personal Accident and Illness	$1,000 to $2,500	Varies with income level, waiting period, and benefit duration
Professional Indemnity	$600 to $2,000	Required for some licensed practitioners, optional for most
Contract Works	$500 to $3,000+	Scales with project value; often bought per project or annually

The market has been moving in your favour lately. Premiums across most lines dropped 2 to 5% in the first half of 2025 as more insurers competed for trade business. Shopping around now, or using a broker who specialises in trades, will likely get you a better result than sticking with the same insurer out of habit.

State-by-State Requirements at a Glance

Some of these are licensing requirements. Others are contractual. All of them matter.

State	Key Requirements
NSW	PI mandatory for registered design and building practitioners from 1 July 2026. Workers comp threshold is $7,500 in wages.
VIC	Electricians need $5M public liability for their contractor licence. Plumbers need $5M PL plus a warranty endorsement and minimum PI cover.
QLD	Electricians need public liability plus consumer protection insurance. Building designers need PI. WorkCover QLD handles workers comp.
WA	PI required for certain building practitioners. Government project tenders often require PI as a condition of bid.
SA / TAS / NT / ACT	Plumbers in TAS need PL to be licensed. ACT requires PI for registered engineers. NT requires PI for certain building practitioners.

If you're not sure what applies to your trade and state, your licensing body is the right place to check. QBCC, NSW Fair Trading, the Victorian Building Authority, and their equivalents publish current requirements on their websites. Don't rely on what a mate told you two years ago.

Your Checklist by Business Type

Use this to make sure you haven't missed anything based on how you operate.

Sole Trader, No Employees

• Public liability insurance (check the level required for your licence and usual worksites)
• Tools and equipment insurance (especially if you carry gear in a van or on a trailer)
• Commercial vehicle insurance for your ute or van
• Personal accident and illness insurance (workers comp doesn't apply to you)
• Professional indemnity if your licence requires it

Subcontractor Working for Builders or Principals

• Public liability is almost always contractually required before you set foot on site
• Check whether contract works insurance is already in place by the principal, and what it covers
• Tools and vehicle cover are still your responsibility, not the builder's
• Personal accident cover still applies to you as a subbie
• Some contracts will specify minimum cover levels and require a certificate of currency before you start

Small Trade Business with Employees

• Workers' compensation is mandatory the moment you start paying wages above your state's threshold
• Public liability should reflect your full business activity, not just one person's work
• If employees drive business vehicles, your commercial motor policy needs to reflect that
• Consider management liability or statutory liability cover as the business grows
• If you provide design advice or run projects, PI is worth having regardless of whether it's mandated

A Few Things That Catch Tradies Out

Completed Works Coverage

Your public liability policy needs to cover claims that arise after you've finished a job, not just while you're on site. This is called "completed operations" or "products and completed operations" cover. A cracked retaining wall, a wiring fault, a leaking pipe behind a wall, these things get discovered weeks or months later. If your policy only covers you while you're actively working, you're exposed the moment you pack up and leave.

Home and Contents Won't Cover Your Business Tools

This surprises a lot of people. If your tools are stored at home and someone breaks in, your home and contents policy will almost certainly exclude them because they're business assets. You need a separate tools policy to be covered.

Your Premiums Are Tax Deductible

All your business insurance premiums, including public liability, tools, and commercial vehicle, are deductible as business expenses. If you renew or buy before 30 June, the deduction lands in the current financial year. Worth timing if you're near the end of the financial year and trying to manage your tax position.

Bundling Can Save You Money

Some insurers and brokers offer packages that combine public liability, tools, and vehicle cover under one policy with a single renewal date. Bundled packages often work out 10 to 25% cheaper than buying separately, and they're a lot less admin to manage. Worth asking about if you're getting multiple policies at once.