Public liability insurance for tradies: a plain guide

What public liability insurance is and who needs it

Public liability insurance covers a business if its work injures someone or damages their property and the business is legally liable. For a tradesperson that might be a customer who trips over a lead, or a burst pipe that floods a kitchen.

There is no single national law that makes every tradie hold it. The Australian Government's business.gov.au site says some states and territories require it for certain occupations. Two examples:

  • Queensland electrical contractors: the Electrical Safety Office requires public and products liability cover of at least $5 million, plus consumer protection insurance of at least $50,000.
  • Victorian licensed plumbers: the required insurance includes public liability cover of at least $5 million.

Even where the law is silent, builders, head contractors, councils and commercial clients commonly ask for a certificate of currency before a tradie can start on site.

Do not confuse this cover with home warranty schemes. Those protect the homeowner if a builder dies, disappears or becomes insolvent. In NSW, home building compensation cover is needed for residential jobs over $20,000 including GST. In Victoria, domestic building insurance is needed for work worth more than $16,000.

What is usually covered, and common exclusions

A policy typically pays compensation the business is legally liable for, plus the cost of defending a claim. Products liability is often bundled in. It covers injury or damage caused by goods you supply or install.

Common exclusions:

  • injury to your own employees, which is a workers compensation matter
  • the cost of redoing your own faulty work
  • your own tools, vehicle and stock
  • advice or design given for a fee, which is a professional indemnity matter
  • asbestos work, unless the policy says otherwise
  • work above a set height, below a set depth, or involving heat, unless declared
  • liability you take on under a contract that goes beyond what the law would impose
  • subcontractors, unless the insurer has been told about them.

How it is sold, and when a broker is the usual route

  • Direct insurers: several sell online policies for common trades such as carpentry, painting and gardening.
  • Brokers: a broker can place trade cover with insurers and agencies that do not sell to the public, and can arrange tools, vehicle and income cover at the same time.
  • Underwriting agencies: specialist agencies write trade packages on behalf of insurers, usually through brokers.

A broker is the normal route for higher-risk work. Examples are roofing, demolition, scaffolding, excavation, asbestos removal, welding and other hot work, and work on high-rise or mine sites. It is also usual where you engage subcontractors, sign contracts with indemnity clauses, or have been declined. Check a broker's licence on the ASIC professional registers.

What makes this cover hard or expensive to get

  • The type of work. Trades that use heat, work at height or carry out structural work pay more and have fewer insurers to choose from.
  • Turnover and staff numbers, which most insurers use to set the premium.
  • Past claims.
  • Heavy use of uninsured subcontractors.
  • Contracts that require a high limit or name other parties on the policy.

Business policies generally carry a duty of disclosure. Tell the insurer what you do in full, including occasional work outside your main trade. A claim for an activity you did not declare may be refused.

Questions to ask before buying

  • Does the business description on the policy match every type of work I do?
  • What limit do my licence, contracts and clients require?
  • Are products liability and completed work covered after I leave the site?
  • Are my subcontractors covered, or must they hold their own policy?
  • Are there height, depth or hot work conditions?
  • Does the policy cover work in other states?
  • What is the excess for each claim?
  • What is the broker paid?

Where to complain

Complain to the insurer in writing first and ask for its internal dispute resolution process. If the complaint is about a broker's service, complain to the broker.

The Australian Financial Complaints Authority (AFCA) is the external complaints body for insurance and is free to use. Its rules exclude some business covers, and public and products liability under a small business policy is one of them. Ask AFCA on 1800 931 678 whether your complaint, including one about a broker, is within its rules. If it is not, consider independent legal advice.

Find a licensed broker

Browse businesses licensed to arrange general insurance in your city, or search every state.

Sources

Last checked: 2026-10-06

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