Public liability insurance is not, for most trades and services, compulsory under Australian law. That fact is where the confusion starts, because in practice sole traders find they cannot work without it.
Where the Requirement Really Comes From
- Head contractors and principals. No certificate, no site access.
- Licensing bodies. Some occupational licences and registrations carry insurance conditions.
- Landlords and venues. Market stalls, leased premises and event spaces almost always require it.
- Councils and government work. Standard procurement terms specify limits.
- Clients themselves. Larger customers increasingly ask before engaging anyone.
The Part That Matters Most for a Sole Trader
A sole trader is not a separate legal entity. There is no company to absorb a judgment. If someone is injured by your work, or you damage a client’s property, the liability attaches to you personally — and to whatever you personally own.
That is the real argument for cover. It is not the certificate. It is that the alternative to an insurer paying is you paying.
What It Covers, in Plain Terms
- Injury to a member of the public, a client or a person on site.
- Damage to property that is not yours — a floor, a wall, a vehicle, a neighbouring building.
- Legal defence costs associated with a covered claim.
What it does not cover: your own tools and plant, your own injuries, faulty workmanship itself, or the cost of redoing your work. Those need business insurance, personal accident cover and, for advice-based work, professional indemnity.
How Much Cover
Most sole traders in trades and services start at $5 million or $10 million. Construction and civil work commonly requires $20 million. The jump between tiers is usually modest — see our guide to choosing a public liability limit.
Getting Your Occupation Right
Premium and cover both turn on how your work is classified. Describe what you actually do, including the occasional job outside your normal scope — working at heights, hot works, or operating plant. An occupation described too narrowly is the quiet cause of a declined claim.
If You Also Run Plant or a Vehicle
Public liability does not cover your ute, your trailer or your machine. If you own equipment, look at plant and equipment cover, and if you tow, check how your trailer is dealt with.
What It Typically Costs, and What Moves the Price
Premiums for sole traders are driven by occupation first and turnover second. A consultant working from a laptop and a roofer working at height are different propositions regardless of revenue. The other factors underwriters weigh are:
- Whether you work at heights, use hot works, or work near water, services or live traffic.
- Whether you employ or engage anyone, even occasionally.
- The limit required — the step from $5 million to $10 million is usually modest.
- Claims history, including anything from a previous business.
- Whether you manufacture or import products.
Sole Trader, Company or Trust
Cover follows the entity, not the person. If you later incorporate, the policy must be re-issued in the company’s name — an old policy in your personal name does not protect a company, and a certificate in the wrong name will be rejected by principals.
The same applies to trading names. The insured should be the legal entity that signs contracts and issues invoices, with the trading name listed alongside it.
The Claims That Actually Happen
Sole trader liability claims are rarely dramatic. They are a dropped tool through a customer’s window, a leak that damages the unit downstairs, a ladder that marks a rendered wall, a client tripping over an extension lead, or a scratch across a car parked next to the job. Small events, and each easily worth more than a year’s premium.
Common Questions
I only do small residential jobs. Do I still need it?
Job size does not limit liability. A small job in an occupied home is exactly where property damage and injury claims happen.
Am I covered under the head contractor’s policy?
Almost never for your own liability. Being on their site does not make you their insured.
What if I only work a few months a year?
Cover is annual, but the premium reflects turnover. Declare it honestly and it is priced accordingly.
Talk It Through
Request a quote or call 1300 983 940 and we will match the cover to the work you actually do.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.