Business Insurance For Contractors

Compare business insurance quotes with Savvy to help find the best policy for your work as a contractor. 

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, updated on August 1st, 2023       

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We’ve partnered with BizCover to bring you a range of business insurance policies to help you compare them side by side.

As a contractor, you’re accustomed to working for yourself and calling the shots. You can often choose who you work for and what type of jobs you undertake. However, along with this freedom of choice also comes responsibility. For this reason, having adequate business insurance is vital if you’re a contractor. 

You can compare quotes for many types of business insurance here with Savvy. Just answer a few simple questions about the type of work you undertake and the insurance you need and you’ll have multiple quotes from a range of respected insurers to consider instantly. Use our quick and easy service to help you compare policies today. 

What types of insurance should I buy for my contracting business?

Depending on the type of work you undertake as a contractor, your business insurance needs may differ. However, they’ll likely include the following: 

Public liability insurance 

Public liability insurance is essential for anyone who deals with members of the public, including customers and clients. It can cover you against claims that your business activity caused injury to a member of the public, or damaged their property. This insurance can offer between $5 million and $20 million worth of coverage and is compulsory in many circumstances in Australia, such as on most building sites and if you’re organising a public event or market.   

What it covers:  

  • Third-party personal injury claims 
  • Damage to a third party’s property 
  • Legal fees to defend yourself 

Professional indemnity insurance 

Professional indemnity insurance can cover you against claims that the advice, recommendations or service you provided as a contractor were either incorrect or negligent. It’s an important type of insurance to have for anyone who offers advice or services as a contractor. For example, if you’re an IT professional or contractor, there may be network failures which crop up during your work which you’re found liable for. Cover is available starting from $250,000 up to $10 million or more. 

What it covers 

  • Payment of compensation if there’s a successful claim against you 
  • Payment of court-awarded damages to the litigant 
  • Cover for your legal defence costs 
  • Cover for the cost of disciplinary proceedings or investigations 

General business insurance  

If you work as a contractor or sub-contractor, you may be a sole trader or run your own business. General small business insurance can offer cover in a variety of areas, such as if you have portable equipment which you wish to insure. You can take out general liability insurance as a package (which also includes your professional indemnity and public liability insurance, for example). 

Commercial vehicles aren’t included, so you may need separate commercial vehicle protection for your work vehicle.  

What it covers: 

  • Fire, storms, impacts and collision which cause damage to your business assets 
  • Theft, vandalism and forced entry to your business premises 
  • Cover for electronic and other portable equipment 

Personal accident and illness insurance  

Since you rely on yourself to produce an income as a contractor, taking care of your health should be a high priority. Accident and sickness insurance can provide cover for you if you become sick and are unable to work, offering a weekly replacement income if you’re injured or ill.  

What it covers: 

  • Loss of income as a result of an injury or illness 

 Optional extras can include: 

  • Death benefits 
  • Disablement benefits 

Payment of business expenses during your recovery period

What isn’t covered under my contractors’ business insurance?  

The most common general exclusions include: 

  • Injury to yourself or your employees 
  • Flood damage 
  • Glass breakage (which can be purchased separately if required) 
  • Unlawful activity or criminal negligence 
  • Reckless behaviour or intentional damage 
  • Anything to do with asbestos 
  • The effects of pollution caused by your business activity 
  • Prior known circumstances or risks 

How much will my contractors’ business insurance policy cost? 

There is no set cost for an insurance policy, as each applicant is different and faces unique risks. There are many factors that influence the cost of business insurance, including the following:   

  • The state you’re in  
  • Whether you live in a rural or urban area 
  • Whether you’re a sole trader, are in a partnership or run a larger business 
  • Your business size and turnover  
  • If you have any employees 
  • Your insurance history 
  • Whether you’ve made an insurance claim in the past five years 

The main factor which will affect the cost of your insurance is the industry and occupation you’re in. All businesses in Australia are classified according to the risk their industry poses, and are allocated a risk ratio. These ratios are used by insurers to calculate the comparative risk of any one business compared to another. However, location is also considered, meaning the cost of insurance for an IT business in the ACT may be similar to that for an identical IT contractor in Sydney, but different for one in far North Queensland, due to the heightened environmental risks associated with that location.  

You can find out how much insurance may cost for your business by comparing quotes right here with Savvy. Whether you need a long-term insurance policy or one for a one-off event, you’ll be able to compare a wide range of options all in one place. 

Why do I need business insurance as a contractor?

You’ve no doubt worked hard to get where you are now, so it makes sense to protect all that hard work in case things go wrong.  Business insurance is there to protect you and your business against a range of eventualities, such as offering cover in certain circumstances for personal injury lawsuits, a fire or theft.   

Most contractors and small businesses have some contingency funds put aside for rainy days, but these emergency funds are rarely sufficient to cover the cost of a major catastrophe. If this happens and you have adequate insurance to protect all the important aspects of your business and revenue, you’ll have a much better chance of getting back on your feet quickly. 

Types of business insurance

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Frequently asked questions about business insurance for contractors

Are there any differences in insurance needs for a sub-contractor as opposed to a contractor?

All contractors and sub-contractors require public liability insurance as a minimum to work on building sites. However, a contractor who holds the main responsibility for a large job or worksite may require additional forms of insurance if their company faces additional risks compared to those faced by a sole trader or sub-contractor. The amount of insurance you need will depend on the nature and scale of your work, so it's likely to be different for everyone. 

As a contractor who employs several sub-contractors, do I also need workers compensation insurance?

Yes – all employers in Australia are required to have workers compensation insurance for workers they employ. However, the definition of what a worker is (as opposed to a contractor) varies from state to state. If you’re deemed to be working solely as a contractor, you’re responsible for your own insurance. It’s important to get expert advice before deciding which type of insurance is right for your personal circumstances. 

Can I take out additional insurance for valuable tools?

Yes – some general insurance policies have a maximum cover limit for an individual tool, ranging from $500 to $1,500. If you have tools that would be particularly expensive to replace, there are insurers which offer additional cover for individual named items to help you protect your most valuable tools and equipment. 

What information will I need to make a claim?

The information you should have to hand when you contact your insurance company to make a claim will include: 

  • The name of the policyholder 
  • Your policy number and start date (which can be found on your Certificate of Currency) 
  • A detailed description of the incident (what happened to cause the damage or loss) 
  • Specific dates and times when the incident happened 
  • Contact details of any other parties involved (or witnesses to the event) 
  • Details of your police report number (if a crime took place) 
  • Details of the property lost or damaged (including its age and value) 
  • Your bank details for settling the claim 


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