What is tradie insurance, and why is it important?

Whether you’re an electrician, plumber, carpenter or builder, working as a tradie means facing risks every day. That’s where tradie insurance comes in. Business insurance can help safeguard you from financial loss, legal claims and downtime so you can focus on what you do best: getting the job done.

In this guide, we’ll break down why tradie insurance matters, who needs it, the main types of cover to consider and how to choose the right policy for your business. Whether you’re just starting out or looking to update your current insurance, this guide will help you make informed decisions and keep your business protected.

Why is tradie insurance important?

Working as a tradie comes with its fair share of risks. From valuable tools going walkabout to project scope blowouts, there’s a lot that can go wrong in a day’s work. Having business insurance in place helps to ensure you’re protected financially and legally when the unexpected happens.

Here are some of the ways insurance can come in handy for tradies:

Managing everyday risks

Tradies face hazards daily: working on client properties, handling power tools, climbing ladders, transporting gear from site to site. Accidents can happen at any time during the course of an average day. A dropped power drill could crack a client’s tiles, or a supplier could trip over your tools and injure themselves. These incidents can lead to expensive third-party injury or property damage claims. For example, Public Liability insurance covers you if a third-party claim is made against you that your negligent business activities caused them injury or property damage.

Protecting your livelihood

Your tools and equipment are your livelihood. If they’re stolen, lost or damaged, you can’t earn money. Likewise, an injury or illness could take you off the tools for weeks. Insurance such as Portable Equipment insurance or Personal Accident & Injury insurance provide a safety net that keeps your income and business afloat when things go wrong, ensuring one bad day doesn’t derail your career.

Building client trust and winning work

Having insurance is just as much about protection as it is professionalism. Many builders, contractors, and clients won’t hire a tradie without a current certificate of currency. Being insured reassures clients you take responsibility seriously, helping you stand out and secure more work.

Legal and regulatory imperatives

Some trade licenses or state regulations stipulate that tradespeople must hold certain types of cover (such as Public Liability or Professional Indemnity insurance). They may also mandate minimum cover levels. But even when not compulsory, failing to have the right insurance can breach contracts, void licences or lead to heavy financial penalties.

Who needs tradie insurance?

No matter the size or structure of your business, every tradie faces risks that insurance can help manage. Whether you’re a sole operator or running a crew, the right cover helps protect you, your tools, and your livelihood from unexpected setbacks.

• Sole traders: Independent tradespeople are financially responsible for any damage, injury or loss caused while on the job. Without the protection of a company structure, personal assets could be at risk if something goes wrong.
• Tradies with employees or subcontractors: A bigger team often means bigger responsibilities. Employers will often need to hold workers’ compensation (dependent on state and territory laws and regulations). They may also want to consider cover such as Employment Practices, Management Liability or Statutory Liability insurance.
• Subcontractors working under builders or on sites: Head contractors and site managers frequently require subcontractors to carry their own Public Liability insurance.
• Trades that provide advice or design services: Professionals who provide specialised trades advice or services are also at risk. A miscommunication or an oversight during the design process could lead to a costly claim.

Core types of tradie insurance to consider

Public Liability insurance

Public Liability insurance covers you if a third-party claim that your negligent business activities caused them injury or property damage. For example, if a misplaced ladder falls through a client’s car windshield. Public Liability is one of the most common types of insurance taken by tradies in Australia.

Professional Indemnity insurance

Building practitioners in the Northern Territory, specific classes of license in Queensland, specific building practitioner categories in Victoria, and building engineering contractors and building surveying contractors in Western Australia all must carry Professional Indemnity insurance. New South Wales will soon join this list, with Professional Indemnity insurance becoming mandatory for registered building practitioners in July 2026.

Portable Equipment insurance

Portable Equipment insurance (also sometimes known as General Property or tool insurance) covers you for loss and damage to items of portable equipment associated with your business. These can include your tools of trade and items of stock.

Theft insurance

Tradies rely on tools to get the job done. This equipment can be worth hundreds or thousands of dollars. Theft insurance covers you against loss and damage as a result of theft or attempted theft from your business premises. Damage to the building, locks and safes as a result of a covered event will also be covered.

Tax Audit insurance

Tax Audit insurance covers a business for specified costs in the event that it is selected by the Australian Tax Office for auditing. The policy offers coverage for the costs of accountants and other professional fees incurred due to the audit.

Personal Accident & Illness insurance

Personal Accident & Illness insurance can provide cover should you become permanently disabled or pass away as a result of an accident. Cover can also include a weekly benefit for loss of income if you are unable to work as a result of an unexpected injury or illness (even if it occurs outside of your employment).

Many sole traders and owner/operators choose to take out this kind of insurance, as it can offer peace of mind to those who are solely responsible for their own income and business operations.

Real-life tradie insurance claim example

A handyman was using a chainsaw to cut down a decayed tree that had fallen. While cutting through the deteriorated tree limb, the limb prematurely separated and crushed the chainsaw, completely destroying it.

Luckily, the handyman held Portable Equipment insurance as part of his Business Insurance Pack. The incident was attributed to the substantial decay of the tree and, after assessing the circumstances, the insurer accepted the claim and paid $1,049 to replace the chainsaw.

If the tradesperson had not held Portable Equipment insurance, he would have had to pay for a new chainsaw completely out of his own pocket. This kind of bill is enough to set some tradies back significantly – especially when it happens out of the blue when you’re least expecting it.

How to choose the right kind of tradie insurance

When it comes down to it, trying to find business insurance that matches your unique situation and requirements can be challenging. That’s why BizCover has made it fast and easy for tradies to get online insurance quotes, no matter where you are or what time of day it is. Compare insurance policies from leading insurance providers and get covered in minutes.

Still unsure what kind of trades insurance you may want to consider? Contact our friendly team on 1300 249 268 and they’ll be happy to help you out.