5 Must-Have Insurances for Every Australian Tradie

Working in a trade is one of the most physically intensive and hands-on professions in Australia. According to Safe Work Australia, tradespeople account for nearly 60% of serious workplace injury claims—and that’s despite representing only about 30% of the workforce. With high injury rates, expensive tools, and frequent exposure to public liability, the financial risks are real.

Whether you're a solo electrician, a plumbing contractor with a small crew, or a full-time builder, having the right insurance isn’t a luxury—it’s vital. This guide explains the five most important types of insurance for tradies, with real scenarios, tips for choosing policies, and highlights of how each coverage protects your livelihood.

1. Public Liability Insurance

If you interact with clients, work on third-party properties, or take on contract work, tradesman public liability insurance is non-negotiable. It covers legal costs and damages if your work causes injury to a person or damage to property.

Why It Matters

Public liability claims can cost tens of thousands of dollars—or more—especially if property damage or medical bills are involved.

Example

A plumber unknowingly installs a faulty pipe that bursts a week later, damaging a client's wooden flooring and walls. Repairing the damage and dealing with the client’s claim could cost over $20,000. If uninsured, that cost comes out of your pocket.

What to Look For

• Coverage amounts range from $5 million to $20 million, depending on your work scope.
• Protection for subcontractor mistakes if you hire help.
• Coverage across multiple locations, especially if your job sends you to different sites.

Tradesman public liability insurance gives you peace of mind and protects your reputation when unexpected incidents occur. It’s typically required when working with builders or on larger construction projects.

2. Workers Compensation Insurance

If you have employees—even just one—you are legally required to have workers' compensation insurance. For sole traders or subcontractors, this type of insurance may not be mandatory but is still highly recommended if you frequently work in high-risk environments.

What It Covers

• Lost wages due to a work-related injury or illness.
• Medical expenses and rehabilitation.
• Legal liability if workplace safety obligations are breached.

Example

An apprentice falls from a ladder at a residential job site and can’t work for several weeks. Workers' compensation covers the apprentice’s wages and medical treatment. Without this, the employer might face a lawsuit or WorkSafe penalty.

Sole traders often assume personal risk. In that case, additional policies discussed below, such as income protection, play an important role.

3. Income Protection Insurance

If you’re a sole trader or contractor, getting injured or falling ill could mean your income stops immediately. That’s why investing in the best income protection insurance for tradies is one of the smartest financial decisions you can make.

What It Does

• Replaces up to 75% of your pre-tax income if you're unable to work due to illness or injury.
• Helps with mortgage payments, bills, school fees, and other commitments while you’re recovering.
• Widely customisable: You can choose policy waiting periods (14 days to 90 days) and benefit periods (up to 5 years or until age 65).

Real-World Scenario

A carpenter suffers a herniated disc while on the job and can’t lift or bend for three months. With income protection in place, he receives fortnightly payments until he’s cleared by a doctor to return to work.

Key Tip

Make sure the policy is “own occupation”—meaning you can claim if you can’t work in your trade, not just if you’re unable to work any job.

For many tradespeople, a single accident can wipe out savings or put mortgage repayments at risk. The best income protection insurance for tradies protects your monthly cash flow even during recovery.

4. Tool Insurance (General Property Insurance)

Your tools aren’t just equipment—they’re your livelihood. According to insurance data, the average claim for stolen tradie tools in Australia ranges from $2,000 to $5,000 per event.

What It Covers

• Theft, vandalism or accidental damage of tools and portable machinery.
• Replacements for gear stolen from workshops, job sites or your vehicle.
• Often part of a broader tradie insurance package.

Example

An electrician’s van is broken into overnight—$8,000 worth of gear disappears. With tool insurance for tradies, replacement costs are covered, allowing for minimal disruption to projects.

Pro Tips

• Maintain a photo inventory of your tools with serial numbers and purchase receipts.
• Choose a policy that offers replacement value versus market value wherever possible.
• Confirm if your tools are covered off-site or in a vehicle overnight.

Looking for tool insurance Australia-wide? Contact Tradies365 today.

5. Contract Works Insurance

Construction projects are filled with unknowns: fires, weather damage, vandalism, and supplier delays. If you’re responsible for a section of work or materials while on-site, contract works insurance (sometimes called construction insurance) is essential.

What It Covers

• Damage to building materials, equipment or the partially completed structure during a project.
• On-site theft of high-value construction items.
• Delays due to events like natural disasters or vandalism.

Example

A storm damages half-installed cladding on a house extension. Contract works insurance covers the repair materials, labour rework, and any project delay costs.

Contract works insurance is especially important if you’re taking on larger residential or commercial contracts. Many clients or site managers will request proof of this coverage before assigning work.

Bonus: Motor Vehicle Insurance for Work Vehicles

While often overlooked, work utes, trucks, or vans are vulnerable when transporting tools or materials. Standard personal vehicle insurance may not protect commercial use or claims for damaged equipment.

Key Features to Look For

• Business use coverage.
• Tool protection while stored in the vehicle.
• On-road liability, towing, and downtime compensation.

Insuring work vehicles under a tradies insurance policy avoids gaps in protection and keeps your transport and mobile workshop functional.

There’s no one-size-fits-all solution. Choosing the right tradesman insurance means understanding the specific risks involved in your daily work. From lifting heavy materials and handling sharp tools to interacting with customers on-site, the right insurance allows you to operate confidently without the fear of financial fallout.

You should consider combining multiple policies—such as tradesman public liability insurance, income protection, and tool insurance for tradies—into a custom tradie insurance package. Many insurers offer multi-policy discounts, which can save you money and simplify renewals.

Take the Next Step

Whether you're updating your coverage or just getting started, take time to review your policies:

• Are your tools properly insured?
• Could your business survive if you couldn't work for 8 weeks?
• Is your public liability coverage adequate for today's job sizes?

If the answer to any of these is no, it’s time to act.

Get your free quote on comprehensive insurance for tradies today. Protect your tools, income, and reputation—because in your line of work, certainty matters.

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Note: The material offered here is for informational purposes only. It does not constitute legally binding advice and should not be a substitute for a consultation with an insurance expert.