Can Self-Employed Tradies Get Income Protection?

Running your own trade business, whether as a plumber, carpenter, sparkie, or concreter, is hard work. There's no paid sick leave or employer backup when you take time off. That's why income protection insurance is a safety net worth serious thought for any self-employed tradie.

Tradies365 doesn't arrange income protection or life insurance. We arrange personal accident and illness cover, which can pay a weekly benefit if an injury or illness stops you working, depending on the policy. Here's how income protection works, what to compare, and how we can help.

Why self-employed tradies look at income protection

1. Your income stops when you get hurt or sick

If you can't work due to injury or illness, there's no pay coming in. Every day on the tools brings risk: ladder falls, tool accidents, back strain, burns or electrical shocks. Missing work for weeks or months can hurt your family's finances fast.

2. Workers comp only covers work-related incidents

Workers compensation isn't always an option. If you're a sole trader, workers compensation insurance doesn't cover you (business.gov.au). Workers compensation also only pays if your injury or illness is tied to work. Income protection insurance can fill the gap, covering illness or injury even if it's not work-related, depending on the policy.

3. It can replace part of your income

Income protection can pay part of your pre-tax income while you're off work, up to the benefit amount in your policy. That can help keep rent, mortgage, food, and bills in motion while you focus on recovery.

4. Tax on the premiums

Whether you can claim the premiums at tax time depends on the cover and how it's held, so check the ATO rules: is income protection tax deductible?

How income protection insurance works

Benefit period & waiting period

• Waiting period: how long after an injury or illness before payments begin. Waiting periods vary by policy; Moneysmart explains them. A shorter wait means payments start sooner, but premiums are usually higher.
• Benefit period: how long you receive payments, often until you recover, up to the period the policy sets.

How the policy defines being unable to work

Policies define being unable to work in different ways, and the definition can change the longer a claim runs, so check how the policy wording defines it before you decide.

Claiming process

1. Notify the insurer as soon as possible, in line with the policy rules.
2. Submit the claim form, medical documents and proof of income.
3. Wait for the insurer's assessment. If the claim is accepted, payments begin after your waiting period ends.

Expect requests for doctors' reports or additional documentation; the clearer your paperwork, the smoother the process.

Exclusions & limits

• Pre-existing conditions not disclosed at application may be excluded.
• Injuries from criminal activities or deliberate acts often aren't covered.
• Some policies exclude high-risk hobbies unless specified.
• Benefits are capped at a share of your income or a total payout amount.

How Tradies365 can help

Knowing your trade

We know that plumbers, builders, electricians and concreters all face different risks. We ask about your trade and your income, then compare personal accident and illness policies from insurers to help you choose.

Plain English

We cut out the jargon. Ask for a quote for personal accident and illness cover, and talk with someone who understands your trade, not corporate speak.

Flexible options

Whether you're a sole trader or run a small crew, we can help you compare personal accident and illness policies and balance the cost, waiting period and benefit against your cash flow and lifestyle.

If you need to claim

If something happens, call us. We manage your claim with the insurer from start to finish. The insurer decides whether it's paid and how much.

Key choices to think about

1. Waiting period vs premium: A longer waiting period usually lowers the premium, but you need savings or leave to cover the gap. Think about how long you could manage without your usual income.
2. Benefit length: A longer benefit period usually costs more, but a shorter one may run out before you recover from a long illness or injury.
3. Benefit amount: Policies pay part of your income, up to a limit the insurer sets. A higher benefit adds to the premium.
4. Own vs super funding: Moneysmart says policies outside super might allow a higher amount of cover and more features. Cover through super is paid from your super balance, and the tax treatment differs, so check with the ATO or your accountant.

Conclusion

For tradies, income protection is one way to protect your ability to earn if injury or illness stops you working, depending on the policy.

At Tradies365, our brokers arrange personal accident and illness cover and compare policies from insurers, including the cover, waiting periods and benefit periods for your trade and situation. We explain your options in plain English, and if you need to claim, you can call us.

FAQs

What sets the premium?

Your age, health, trade and the cover you choose. See what income protection costs.

Is income protection better than workers comp?

They serve different roles. Workers compensation only covers work-related injuries or illnesses, and self-employed people often aren't covered by it. Income protection can cover injury or illness whether or not it is work related, depending on the policy.

Can I claim income protection if I'm self-employed?

Yes, self-employed people can apply. As a sole trader or contractor you're usually not covered by an employer's workers compensation. The insurer asks about your work and income, and decides whether to offer cover and on what terms.