Business insurance for Australian sole traders

Direct answer

What should a sole trader in Australia compare, and is there a basic business policy? There is no single SKU called “business insurance” that answers every invoice. You start from activity. Who could you injure on a site or in a client’s home? What advice or design do you sell that a client could say cost them money? Which tools sit in the van? Which contract already specifies a limit and a certificate of currency? Then you match those events to product families — most often public liability and, if you sell advice or professional services, professional indemnity — and you force every quote onto the same occupation description, limit, excess and territorial wording. Only then do you rank the premiums you were actually offered.

This page is general information for people who work for themselves. It is not a broker service, not a certificate, and not a recommendation that you must buy any particular cover. Some occupations have licensing or scheme arrangements this page will not interpret. Read the disclaimer.

Sole-trader basics — four questions before a quote form

The AIO question is “what do I actually need as a sole trader?” We will not answer “need”. We will answer what to write down.

1. Who could be harmed, and whose property? A cleaner in a kitchen, a tradesperson on a site, a consultant in a client’s office, a maker at a market stall — the injury and damage stories differ. That story is the public-liability conversation.
2. What do you sell that is advice, design, specification, or a professional service? If a client could claim they lost money because of your work product, you are in a professional-indemnity conversation. If you only supply labour and materials with no professional advice, PI may be the wrong aisle — or a contract may still demand it. Read the contract.
3. Where do you work? Home office, client sites, a rented studio, a vehicle. Home and car wordings often restrict or exclude business use. A cheaper household policy that you already hold is not automatically a business policy. Inventory the exclusion before you assume overlap. How to compare treats overlap as step one.
4. What has someone already demanded in writing? Principal contractors, councils, markets, platforms, and landlords ask for certificates with named limits, sometimes with their name as an interested party, sometimes with wording about subcontractors. The certificate is a specification. A cheaper quote that cannot issue that certificate is not a comparable product.

Write those four answers on a page. That page is the brief. A “business pack” landing page is not.

Public liability — injury and damage to others

Public liability (sometimes general liability) is typically about your legal liability for injury to other people or damage to their property arising from the business, subject to the PDS. It is not workers compensation for employees (a different, often compulsory, regime if you have staff). It is not a promise to rebuild your tools. It is not PI.

Compare liability quotes on:

• the occupation description you typed (and whether it matches the work you actually take)
• the limit of indemnity (the contract may already name one; we will not invent a “usual” limit)
• excess, including whether it applies to injury claims
• products liability if you make or supply goods
• hot work, height, excavation, or similar exclusions if you are a trade
• principal’s indemnity or interested-party wording if a site requires it
• territorial limits (Australia only versus elsewhere)

A cheaper premium that describes you as “consultant” when you are on a roof is a misrepresentation problem. Australians have a duty to take reasonable care not to make a misrepresentation. Guessing a safer occupation class to win a price is how cheap certificates become declined claims.

Professional indemnity — the advice product

Professional indemnity is typically about civil liability arising from a breach of professional duty in the services you named — often including defence costs inside or outside the limit, depending on the wording. It is built around notifications, retroactive dates, and sometimes run-off when you stop practising.

Compare PI on:

• the professional services description
• the limit, and whether defence costs eat the limit
• the excess (sometimes including costs)
• retroactive date (work done before a date may be uninsured)
• known circumstances you must disclose
• jurisdiction (Australian claims versus anywhere)
• contractual liability assumed under a harsh client contract (some wordings will not pick up every indemnity you signed)

A cheaper PI quote with a yesterday retroactive date will not quietly cover last year’s project. If you switch, the gap that matters is often the retroactive date and the notification of known circumstances, not only the calendar start. Do not cancel an old PI policy until the new one is on risk and the retro date is understood.

Waiting periods are less central than on health or pet, but notification conditions and “claims made” architecture (common on PI) are a clock of their own. Read waiting periods so you do not import the wrong metaphor, then read the PI chapter on when a claim must be notified.

Other families sole traders meet

None of these is automatic because you bought liability.

Tools, stock, and portable equipment. Theft from a van, damage on a site. Sometimes a small-business pack, sometimes specified portable items. Sub-limits and overnight-in-vehicle exclusions are the product. A home contents policy may give a small business-use limit and stop. See the contents hub for why specified items exist.

Business interruption / weekly income after an insured event. Different again from personal income protection, which is about you being unable to work. Interruption is about the business pausing after an insured property event. Do not compare those premiums.

Cyber. Often a separate wording. Not “the IT extra” on a liability certificate.

Commercial motor and mobile plant. Business use on a private car policy is a classic exclusion. If the vehicle earns, say so on the motor form.

Workers compensation and personal accident. If you have employees, workers compensation is a legal topic for your state, not a comparison-tile topic. If you have no employees, some sole traders look at personal accident or income protection for their own body. That is the life/income aisle, not a liability certificate.

Tax, GST, and licensing. Not insurance. We will not mix them in.

Feature checklist (not a league table)

No prices in the table. Fill them from quotes. Methodology is why we will not rank business insurers or invent a “typical sole-trader premium”.

The excess versus premium trade-off still applies. A high liability excess you cannot fund after a site incident is not a cheaper policy. Underinsurance on tools is a low sum on a portable schedule. On liability, the analogue is a limit below the contract — or below the event you can imagine — which we still will not quantify for you.

Questions to ask before you rank premiums

1. What event did the client, council or platform name in writing, and which product family pays that event?
2. Does the occupation description match the work I will take next month, not the work that sounded safer?
3. What limit must appear on the certificate, and can this quote issue it?
4. If I sell advice or designs, is PI on this sheet — with which retroactive date?
5. What do my home and car policies already exclude when I invoice from them?
6. Are subcontractors, casual labour, or a spouse who helps on Fridays described?
7. If I switch PI, have I notified known circumstances and preserved a retro date?
8. Have I read the PDS, not only the certificate template?

If two quotes cannot match on occupation, limit and retro date, they are different products.

PDS, certificates and claims

Collect the PDS, schedule, and a sample certificate of currency. Search for “we will not”, “occupation”, “subcontractor”, “hot work”, “retroactive”, and “notification”. Certificates are evidence of the contract you bought; they are not a second product. If a principal wants wording the PDS does not give, a cheaper insurer who cannot amend it is not a comparison win.

Claims on liability and PI are legal claims. Notice conditions are strict. Do not admit liability in an enthusiastic email before you have notified the insurer, unless a lawyer in the matter tells you otherwise — and this site is not that lawyer. Claims basics is a general map.

If a dispute leaves the insurer’s internal process, AFCA can hear many general-insurance complaints from small businesses, subject to its rules and monetary limits. Check AFCA’s current jurisdiction rather than assuming.

Official education: MoneySmart on insurance and MoneySmart on self-employment. Neither replaces a PDS or a licence condition.

What we will not tell you

We will not name a cheapest business insurer. We will not say every sole trader “must” hold $20 million of liability — that figure is a contract folklore we will not baptise. We will not say you can skip PI because you are “just a contractor”. We will not interpret your builder’s licence, AHPRA registration, or platform terms. We will not invent a premium as a percentage of turnover.

For a placeholder commercial path, use Compare offers knowing it is a stub.

After you buy

Read the schedule: occupation, limits, excesses, retro date, interested parties. When you take a new kind of job, hire someone, buy an expensive tool, or sign a contract with a higher limit, treat that as a mid-term conversation. A cheap renewal that still thinks you design brochures while you now install kitchens is unfinished business. If a fact was softened to win a price, correct it before a principal asks for a claim.