What Type of Tradie Insurance Do You Need?

Whether you’re a carpenter or a concreter, a plasterer or a plumber, if you’re running your own operation, you’ll know that being on the tools is only one part of a tradie’s job.

Depending on your set up, when you’re not on site, you might also be managing the marketing, balancing the books and sourcing the supplies – and then there’s your small business insurance to sort out.

But, with so many different ​ ​types of insurance for tradies available, it can be tricky to be confident about what cover you actually need. Does it make a difference if you’re a ​ ​sole trader or employ dozens of staff? Are some policies compulsory? And how much is tradie insurance likely to set you back?

To help clear up any confusion so you can avoid making an insurance mistake, we’ve put together this handy guide to tradie insurance, to answer all of those questions – and more.

What is tradie insurance?

There isn’t a specific category of insurance called tradie insurance. Simply put, tradie insurance is essentially business insurance that offers options to cover common risks tradies may typically encounter on the job.¹

Why does having tradie insurance matter for tradespeople?

There are a few reasons, including the fact that risks go hand in hand with your day-to-day ​work.²

For an electrician, this may include anything from accidental shocks to property damage claims;³ builders can be liable if someone else gets injured as a result of their ​ ​work;⁴ and plumbers, meanwhile, are one of the highest injury occupation trades in the construction industry.⁵

Then there’s the fact that in the 2024-25 financial year, more than 25,000 tools were stolen from tradespeople in Queensland alone.⁶

Is tradie insurance compulsory in Australia?

It can be. For example, if you have a commercial motor vehicle, whether it’s a ute or a van, Compulsory Third Party (CTP) insurance is mandatory.¹ CTP insurance, known as Green Slip insurance in NSW, covers injuries to people caused by car accidents and is a legal requirement before you can register any vehicle in Australia.⁷

Some other types of insurance that may be mandatory include:

Workers compensation insurance

If you’re a tradie who employs other people – including ​ ​apprentices⁸ – you’ll need to have ​workers compensation insurance.¹ It can cover your staff’s medical expenses as well as their wages if they are injured at work or become sick due to their work.⁹

Public liability insurance

This is a mandatory part of licensing requirements for certain trades in some states and ​ ​territories.¹⁰ We'll go into ​public liability insurance in more detail below.

Home warranty insurance

Building businesses may be required to take out this type of insurance depending on the value of the residential project they’re working​ ​on.²

This insurance is designed to cover homeowners when a builder is unable to complete the work due to events such as insolvency.¹¹ You can find out more about the requirements for builders in your state or​ ​territory:

• ACT – Residential building work insurance
• NSW – Home building compensation insurance
• Qld – Home warranty scheme insurance
• SA – Building indemnity insurance
• Vic – Domestic building insurance
• WA – Home indemnity insurance

Which type of insurance for tradies do I need?

It depends. A good place to start can be to work out which types of insurance are legally required in your industry, before weighing up whether any optional covers that are available may also make sense for you.¹

Beyond the mandatory policies, like CTP for your vehicle and workers compensation insurance if you employ staff, what other cover should you consider? To help you navigate your choices, we’ve answered some common questions tradespeople ask when they’re researching tradesman insurance options.

Do I need public liability insurance as a tradie?

Yes, you might. ​ ​Public liability insurance is useful for businesses, such as tradespeople, that interact with people face to face, including if customers visit your premises or you visit theirs.¹²

It covers your potential liabilities if a customer or member of the public gets injured or their property gets damaged because of your negligence while you’re on the job.¹³

Public liability insurance might provide cover for such events as:

• A customer being shown through a tradie’s manufacturing premises gets injured by the sharp edges of a machine¹³
• A tiler knocking over a ladder while moving equipment takes a large chunk out of a customer’s wall.¹⁴

As you might have already read above, public liability insurance is also a ​​mandatory part of licensing requirements for certain trades in different parts of the country.¹⁰

For example, in Queensland, electricians need public liability insurance to obtain or renew a licence,¹⁵ and it’s the same story for plumbers – and some other trades – in Victoria.^16-18

Electrical contractors need public liability for licensing purposes in Western Australia,¹⁹ and so do licensed builders, plumbing contractors and electrical contractors in Tasmania.^20-22

You might like to check with your national or state industry body to see if your trade is legally required to have public liability insurance.

But even if it’s not legally mandatory in your industry, having it might be a stipulation of a project’s contract. For example, in the building and construction industry, having public liability cover is typically a contractual obligation in every state and ​ ​territory.²

Do I need professional indemnity insurance?

Perhaps – although this type of insurance typically applies to occupations that provide professional advice or services.¹ It helps cover the costs of claims arising from mistakes, neglect or breaches of contract in the professional advice or services you provide, where a client suffers a loss.¹

Certain types of building practitioners might need professional indemnity insurance in order to apply for or renew a building registration. For example:

• In Victoria, it’s a registration requirement for building inspectors, designers and surveyors, as well as quantity surveyors and professional engineers in certain situations.¹⁸
• In the ACT, building surveyors and plumbing plan certifiers are required to hold professional indemnity insurance.²³

If you’re unsure whether you need professional indemnity insurance as a tradie, you could double check with your national or state industry body.

What about product liability insurance – do tradespeople need that?

They might. It’s not a legal requirement but if you sell or supply goods as a tradie – or you simply repair or service them – product liability insurance can cover you against claims for injury or damage if the products ​fail.¹

For example, if you install or repair a dishwasher and a fault in your workmanship or product you used results in a leak that causes damage to a customer's flooring or carpet, a claim could be made against you for that damage.²⁴

Does workers compensation insurance cover me if I’m a tradie running my own business?

If you’re a sole trader or are running your business with someone else as a partnership, no, you can’t cover yourself with workers compensation ​ ​insurance.⁸

Instead, income protection insurance could help cover your bills if you can’t work.²⁵ If you have a superannuation fund, it might be worth checking whether income protection insurance is included as part of the package.²⁵

However, some schemes may allow other types of business owners or directors to opt in for cover, so it’s worth checking your options with your state or territory’s workers compensation ​insurer:²⁶

• ACT: WorkSafe ACT
• NSW: State Insurance Regulatory Authority
• NT: NT WorkSafe
• Qld: WorkCover Queensland
• SA: ReturnToWorkSA
• Tas: WorkSafe Tasmania
• Vic: WorkSafe Victoria
• WA: WorkCover WA

Are my tools and equipment covered by tradie insurance?

They might be, depending on the policy and cover options you choose. Contents and equipment insurance could help you replace the tools or machinery you rely on.¹²

Again, depending on the policy, your gear might be covered for loss or damage due to events such as fire, storms or theft.¹

Does Youi Small Business Insurance cover tradies?

Yes. “At Youi, our Small Business Insurance can provide cover for various kinds of tradespeople running small businesses,” says Mervyn Hartley, Youi’s Head of Product – Home and Small Business.

“Youi’s Small Business Insurance automatically includes public liability and products liability cover as standard,” says Hartley.

From there, you can also choose from a number of optional covers to add to a Small Business Insurance policy at Youi, for an additional cost. Some of these include:

• Business property damage – Under this optional cover, contents, materials and equipment kept at your business premises are covered for loss or damage caused by an accident, for example by fire, storm, flood or theft. Stock in trade, including raw materials, can also be covered at the premises, and while in transit to or from your business within Australia.^27,28
• Business items – This covers loss or damage to your portable business gear, including your tools of trade and even some mobile machinery.²⁹
• Business interruption – If an unexpected event forces your business to temporarily grind to a halt, this helps cover your lost profit and extra operating costs.³⁰
• Professional indemnity – With this add-on, you’re covered for civil liability claims that arise from the professional advice or specialist services you provide to clients.³⁰
• Tax audit – This option provides cover for the professional fees and charges you might face if your business is audited.³⁰

How much is tradie insurance?

It depends. “The cost of a Small Business Insurance policy with Youi will be determined by a range of factors, including the amount of business liability cover you choose – and we offer several liability limits to suit different business needs,” says Hartley.

“You can select from three levels of cover – $5million, $10million and $20million.”

Thinking specifically about public liability insurance, licensing requirements for some trades require a minimum of $5million cover.^15,16 However, if you wanted to put in a tender for a commercial contract with a state government, for example, you may be required to upgrade to a $10million or $20million ​policy.^31,32

“At Youi, other factors we take into consideration to calculate the cost of insurance include whether you’ve chosen to add any of our optional covers to your policy, where your business is located, the type of business you're running and the number of people you employ,” explains Hartley.

“These kinds of details all play a role in helping us gauge the risk of covering your business.”

So, whether you’re a newly qualified electrician, a carpenter with years of experience under your toolbelt, a jack of all trades running a small handyman business or you’re running a construction company that employs multiple tradespeople, hopefully you now have a better understanding of the type of tradie insurance you might require.

And, if you’d like to learn more about the cover provided by Youi’s Small Business Insurance or you’re reviewing your current level of cover to see if it still suits, why not consider giving our team a call on 1300 010 648 or starting a quote online?

¹Source: Australian Government – Types of business insurance, n.d.
²Source: Master Builders Australia – Submission to Parliamentary Joint Committee on Corporations and Financial Services, March 2025
³Source: Master Electricians Australia – Why insurance isn’t optional: A quick start guide, April 2024
⁴Source: NSW Government – Insurance requirements for contractors working on your home, n.d.
⁵Source: Government of SA SafeWork SA – Plumbers Claims Profile, n.d.
⁶Source: Queensland Police – Tradies urged to ‘lock up their livelihood’ as tool thefts surge across Queensland, October 2025
⁷Source: Moneysmart – Choosing car insurance, n.d.
⁸Source: NSW Government icare – Do I need Workers Compensation Insurance?, n.d.
⁹Source: Australian Government Fair Work Ombudsman – Workers compensation
¹⁰Source: Insurance Council of Australia – Public Liability Submission ICA, March 2026
¹¹Source: NSW Government State Insurance Regulatory Authority – Home building compensation, n.d.
¹²Source: Business Victoria – Find the right insurance, October 2022
¹³Source: Qld Government Business Queensland – Business insurance, September 2024
¹⁴Source: Sprintlaw – Public Liability Insurance Explained: Why Your Business Needs It, February 2025
¹⁵Source: Qld Government WorkSafe – Licensed electrical contractors, March 2025
¹⁶Source: Building and Plumbing Commission – Insurance requirements for licensed plumbers, November 2020
¹⁷Source: Energy Safe Victoria – Registered Electrical Contractors (REC), n.d.
¹⁸Source: Building and Plumbing Commission – Insurance: Building insurance requirements, n.d.
¹⁹Source: WA Government – Electrical contractor’s licence – Application, January 2026
²⁰Source: Tas Government Consumer, Building and Occupational Services – Builder licence, February 2025
²¹Source: Tas Government Consumer, Building and Occupational Services – Plumbing licence – contractor, February 2025
²²Source: Tas Government Consumer, Building and Occupational Services – Electrical licence – contractor, February 2025
²³Source: ACT Government Planning – Responsibilities: Licence responsibilities, n.d.
²⁴Source: Australian Competition & Consumer Commission – Claiming compensation, n.d.
²⁵Source: Moneysmart – Self-employment, n.d.
²⁶Source: Sprintlaw – Understanding Workers Compensation Insurance: What Australian Employers Need To Know, October 2025
²⁷Business Property Damage cover is optional and an additional cost applies. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
²⁸Loss or damage caused by flood, storm or bushfire within the first 72 hours of your policy commencing is only covered in limited circumstances. For full details, see the PDS & Policy Wording.
²⁹Business Items cover is optional and an additional cost applies. Conditions, limits and exclusions apply. The most we will pay for each item is $2,500, up to a total of the Business Items amount noted on your policy schedule per claim, unless a High Value Business Items amount is noted on your policy schedule, in which case the most we will pay for all items with a replacement value of more than $2,500 is the High Value Business Items amount shown on your policy schedule.
³⁰An additional cost applies for optional covers. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
³¹Source: NSW Government buy NSW – Contract clauses, n.d.
³²Source: NSW Government buy NSW – ​ ​​​T-202602 Sewer Main Upgrades and Renewals – Package B – RFT T-2026-2, January 2026