Business Insurance for Contractors

If you’re a contractor or sub-contractor, then you need to protect yourself – unlike employees who are generally protected by their business.

Take a look at the different types of insurances available to you, why they’re important and how you can get covered once you’re ready.

Let’s get started!

What types of insurance are available to a contractor?

The benefits of specific types of business insurance for contractors include protection of assets, peace of mind, business continuity, adherence to industry rules and regulations and much more.

Should something go wrong, or if someone takes legal action against you, it’ll pay to have back up in the form of insurance to protect your assets, livelihood and reputation. The alternative could be painful out-of-pocket expenses!

Compulsory insurance for contractors

Depending on your occupation (e.g. electrical contractor), you may find public liability insurance is mandatory for you to register and operate your business. Public liability insurance covers you in the event your business activities cause injury, loss or damage to a supplier, customer or member of the public and they seek compensation from you.

Please refer to your industry or governing body for further information about any insurance that may be compulsory and continue reading to learn more about types of insurance available to contractors.

Types of business insurance you should consider

We recommend you consider the following types of insurance:

Public liability insurance. As mentioned above, public liability insurance covers legal fees and compensation costs if a client, member of the public or a supplier claims against you for injury or damage to their property as a result of your alleged negligent business activity.
Portable equipment or contents insurance. If you have tools and equipment that you transport from site to site, then this type of insurance is intended to cover the loss or damage to items of portable equipment associated with your business. Wear and tear on tools and equipment is not covered, though. If your tools stay in a workshop, you may want to consider contents insurance.
Professional indemnity insurance. If you provide professional services or give advice, then professional indemnity insurance is designed to respond to claims against your business. This generally relates to claims of losses as a result of actual or alleged negligent acts or omission in the provision of your professional service. For example, youprovide bad advice and it negatively impacts the client.
Personal accident insurance. If you’re injured or become ill, how will you continue to pay the bills? Personal accident insurance offers you (the contractor) cover for loss of income in times of bad health.

N.B. The above listed are individual/standalone forms of cover. However, you can add multiple types of business insurance into one comprehensive insurance policy.

contractor with business insurance

What other types of insurance can a contractor consider?

Additionally, you can also consider the following types of business insurance:

Machinery breakdown insurance. This type of insurance covers the cost to repair or replace specified machinery following a sudden breakdown.
Electronic equipment insurance. The breakdown of electrical equipment can cause massive interruptions. Electronic equipment insurance could cover costs to repair or replace specified electronic equipment. Consider any computers or printers you may have.
Statutory liability insurance. What happens if you breach legislative requirements? Statutory liability insurance Covers the company, senior management and employees for allegations of wrongful breaches of key legislation in the course of your business. This type of insurance meets fines and penalties payable in specified circumstances and related legal expenses.
Tax audit insurance. If the ATO spring an audit on you then it’ll pay to be insured. Tax audit insurance covers the costs of accountancy fees in connection with an audit by the ATO.

There are several other types of business insurance on offer including cyber liability, theft, business interruption, transit and money insurances. Use our free online comparison tool to explore a comprehensive list of options and compare. It’s like a shopping cart!

N.B. All these forms of cover are subject to the terms and conditions contained in the policy wording or Product Disclosure Statement (PDS). Always read your policy wording or (PDS) for a complete overview of what’s covered and the applicable exclusions detailed by excluded by your insurer.

Frequently asked questions

How much will insurance cost a contractor?

How much your insurance premiums will cost depends on multiple variables. For example, if you’re an electrician, how big are the projects you work on? How much equipment do you own? Have you made any claims recently?

The easiest way to get quotes is to compare. Use our free online comparison tool to fill in your information and review options based on price, features and benefits – in only a few minutes. Simples!

How much insurance is enough to stave off disaster?

Only you can decide the appropriate level of insurance cover for your business. You can consider what you’re prepared to risk. Can you afford time off work due to illness or injury? What if your tools are stolen or breakdown? These are questions only you can answer. You can call, our trusted business insurance partner, BizCover to discuss the types of insurance that are available.

Does my insurance or premiums alter depending on my business structure?

If your company has multiple employees, then yes, you could pay higher premiums. However, if your business structure is a company for tax purposes and you’re a sole operator , then no, your premiums may be more affordable. For more information on insurance for sole traders, check out our guide.

Safeguard your business and future today!

When you’re a contractor, there’s a thin line between winning and losing. A simple mistake or unforeseen event could throw a spanner in the works – that’s why you should consider insurance.

To get started, simply use our free business insurance comparison service and receive quotes in a convenient side-by-side view. It only takes minutes, and it’s easy-to-use. Compare now!

Business insurance for contractors & sub-contractors