A client trips over your tool bag on a job site and breaks their wrist. A pipe you installed fails two months after completion, flooding the floor below and destroying $80,000 worth of equipment. A worker you've subcontracted damages a heritage wall while drilling. In each scenario, you're potentially liable — and without public liability insurance, you're paying from your own pocket.

Public liability insurance is one of the few non-negotiables in a trade business. This guide explains what it covers, how much you need, what it costs, and the common gaps that leave tradies exposed when a claim actually happens.

What Is Public Liability Insurance?

Public liability insurance protects your business against claims from third parties — clients, members of the public, and other people on your job sites — who suffer personal injury or property damage as a result of your work or business activities.

What it typically covers:

  • Injury to a person caused by your work or negligence
  • Damage to a client's property caused by you or your employees
  • Legal costs to defend a claim against you
  • Compensation payments if you're found liable

What it does NOT cover (important gaps):

  • Injury to your own employees (that's workers' compensation)
  • Damage to property you're working on (that's contract works / contractors' all-risk insurance)
  • Your own tools and equipment (that's tool insurance)
  • Professional errors in design or specification advice (that's professional indemnity insurance)
  • Deliberate or criminal acts

Why Tradies Need It More Than Most

Construction and trade work creates third-party liability risk in almost every job:

  • Clients and their families are present while you work
  • Your materials and equipment occupy shared spaces
  • Defective work can cause ongoing property damage discovered weeks or months later
  • Sub-standard workmanship can create safety hazards for third parties

In addition, many clients — particularly commercial clients, builders, and property managers — require proof of public liability insurance before they'll engage a tradie. It's both a financial protection and a commercial necessity.

How Much Cover Do You Need?

The right level of cover depends on the type and scale of your work. Here are the standard thresholds and what they're suited for:

$5 Million Cover

Suitable for: Low-risk sole traders, domestic only — painters, gardeners, handypeople doing minor residential work

Not suitable for: Any work near high-value property, commercial work, or work where a single incident could easily exceed $5 million in damages

Most industry bodies and clients now consider $5 million the minimum acceptable level.

$10 Million Cover (Most Common)

Suitable for: Most sole trader and small trade business work — plumbing, electrical, carpentry, tiling in residential and small commercial settings

Why: A single serious injury or property damage event can easily exceed $5 million in medical costs, compensation, legal fees, and consequential damages. $10 million provides a meaningful buffer.

Most common requirement: The majority of builders, commercial clients, and strata managers require $10 million minimum public liability from their subcontractors.

$20 Million Cover

Suitable for: Commercial construction projects, government work, heritage buildings, high-value property, multi-storey construction

Why: Larger projects have larger potential consequences. A defect in a commercial building or government facility can produce claims far exceeding $10 million when consequential losses, business interruption, and third-party claims are included.

When required: Government contracts, major commercial projects, and some property management groups specifically require $20 million.

$50 Million+ Cover

Suitable for: Major infrastructure, industrial, and specialised high-risk work

Uncommon for most tradies. If a client is requiring $50 million PLI, they'll normally advise you in the contract specifications.

The Premium: What Public Liability Costs

Public liability insurance premiums depend on:

  • Trade type and risk level — a painter is lower risk than a roofer or a gas fitter
  • Cover level — $10 million vs $20 million
  • Annual revenue — premiums scale with business size
  • Number of employees — more staff = more exposure
  • Claims history — previous claims increase premiums

Indicative Annual Premiums (2025–26)

  • Painter — $800–$1,400 — $1,500–$2,800 — $1,200–$1,900
  • Carpenter — $900–$1,600 — $1,600–$3,000 — $1,300–$2,200
  • Electrician — $1,000–$1,800 — $1,800–$3,400 — $1,500–$2,500
  • Plumber — $1,100–$2,000 — $2,000–$3,800 — $1,700–$2,800
  • Roofer — $2,500–$5,000 — $4,500–$9,000 — $3,500–$7,000
  • Demolition — $3,000–$8,000 — POA — POA

Indicative only — get actual quotes from insurers. Roofing and demolition attract significantly higher premiums due to elevated risk profiles.

The Annual Revenue Declaration Trap

Public liability policies for tradies are typically priced based on your declared annual revenue. When you buy the policy, you estimate your revenue for the year. When the policy renews, the insurer may audit your actual revenue and adjust.

The risk: If your revenue significantly exceeds your declared amount, the insurer may:

  • Charge additional premium (an "adjustment premium") at renewal
  • Claim the policy was underwritten for insufficient premium and reduce cover proportionally
  • In serious cases, argue the policy is voidable for material misrepresentation

The solution: Declare your revenue accurately when applying. Include all income from relevant activities — labour, materials supplied, project management fees. When your business grows significantly mid-year, notify your insurer.

Completed Operations: The Hidden Gap

Most tradies focus on coverage while the job is happening. But some of the most significant liability risks arise from completed work — work that was finished weeks, months, or even years ago.

Examples of completed operations claims:

  • A waterproofing failure discovered 18 months after completion causes $200,000 in water damage
  • An electrical fault from your installation causes a fire 6 months after sign-off
  • A structural defect in your carpentry work leads to injury 2 years after completion

Completed operations coverage (sometimes called "products liability" for installed systems) extends your public liability cover to claims arising from work you've already completed. Most comprehensive public liability policies include this — but check your policy wording specifically.

If your policy excludes completed operations: This is a significant gap. Many cheap policies omit this coverage to reduce premiums. It's worth paying more for a policy that includes it.

Contract Works Insurance: Often Confused with PLI

A common misunderstanding: public liability does not cover the work itself.

If you're building a bathroom and your plumbing floods the existing bathroom during construction — damaging your own work and the surrounding structure — public liability typically does NOT cover the cost to fix the damaged work.

Contract works insurance (also called contractors' all-risk or CAR insurance) covers:

  • Damage to the works you're constructing before completion
  • Materials on site before installation
  • Third-party equipment hired for the job
  • Accidental damage during construction

For significant project work (renovations over $30,000, new construction), contract works insurance is a separate necessity. Some builders carry a blanket policy that covers subcontractors working on their projects — confirm whether you're covered under the builder's policy or whether you need your own.

What Happens When You Make a Claim

Understanding the claims process before you need it reduces stress when an incident occurs.

Step 1: Incident Documentation

As soon as an incident occurs — injury, property damage, complaint:

  • Take photos of the site, the damage, and surrounding context
  • Note the date, time, weather conditions, and who was present
  • Get names and contact details of any witnesses
  • Preserve any relevant materials (failed pipe, faulty fitting, damaged equipment)

Step 2: Notify Your Insurer Immediately

Most policies require notification "as soon as practicable" after an incident. Delayed notification can affect your cover. Even if you're not sure whether a claim will follow, notify your insurer of any incident that could give rise to one.

Step 3: Do Not Admit Liability

This is critical. Do not tell the injured party or their representatives "it was my fault." Your insurer needs to investigate before liability is determined. Admitting liability can prejudice your claim and may even void coverage.

Step 4: Let Your Insurer Handle the Claim

Your insurer appoints a claims assessor and, if necessary, solicitors to manage the claim on your behalf. Your role is to cooperate fully — provide information, documentation, and access to the site or records.

Step 5: Resolution

Most claims are settled without going to court. Your insurer pays the agreed compensation (up to your policy limit), and the excess (your portion) comes from you.

The Excess: Your Out-of-Pocket on Every Claim

Every public liability policy has an excess — the amount you pay on each claim before the insurer contributes. Standard excesses for tradie PLI range from $250 to $2,500 depending on the policy and trade.

Higher excess = lower premium, and vice versa.

Consider: If your excess is $2,500 and you have a claim for $3,000 in property damage, you're paying $2,500 and the insurer pays $500. Was the premium saving worth it? For low-frequency, high-severity risks, a lower excess makes sense — you're unlikely to claim often, but when you do, the amounts can be significant.

Comparing PLI Providers for Tradies

Several insurers specifically target the trades market in Australia:

CGU / IAG

One of Australia's largest general insurers. Comprehensive PLI products with flexible cover levels. Widely accepted by commercial clients and builders.

QBE Insurance

Strong in commercial construction PLI. Comprehensive completed operations coverage. Good for tradies doing commercial or industrial work.

Allianz

Broad trade business PLI with competitive pricing for standard trades. Good for sole traders and small businesses.

Ausure / Steadfast Network Brokers

Insurance brokers with access to multiple underwriters — often better at finding competitive premiums for higher-risk trades (roofers, demolition, gas fitters).

Trade-Specific Schemes (HIA, Master Builders)

Industry association members can access group PLI schemes negotiated by their association. These often provide competitive premiums and industry-appropriate policy terms.

The case for using a broker: For standard trades (painting, carpentry, tiling), direct insurer products are fine. For higher-risk trades, unusual work (heritage buildings, hazardous materials), or higher cover levels, a specialist insurance broker can access markets not available directly and tailor coverage appropriately.

Annual Policy Checklist

At each renewal, review:

  • [ ] Is your declared revenue still accurate? (Update if your business has grown)
  • [ ] Does your policy include completed operations coverage?
  • [ ] Does the cover level ($10M, $20M) still match what your clients require?
  • [ ] Are all your trades and activities listed on the policy? (Adding gas work, for example, if not previously declared)
  • [ ] Are subcontractors who work exclusively for you listed or covered under your policy?
  • [ ] Is your business name and entity correct on the policy? (Sole trader, company, trust?)

A policy issued in your personal name doesn't cover your company. If you've restructured since your last renewal, ensure the policy matches your current legal entity.

Comparison: What Different Insurances Cover

  • Employee injured on site — ✅ — ❌ — ❌ — ❌
  • Client injured on site — ❌ — ✅ — ❌ — ❌
  • Damage to client's property — ❌ — ✅ — ❌ — ❌
  • Damage to work in progress — ❌ — ❌ — ✅ — ❌
  • Tools stolen from site — ❌ — ❌ — ❌ — ✅
  • Claim from completed work — ❌ — ✅ (if included) — ❌ — ❌
  • Your ute damaged — ❌ — ❌ — ❌ — ❌ (vehicle insurance)

Frequently Asked Questions

Q: My client says I need $20 million PLI but my policy is $10 million — what do I do?
Contact your insurer or broker immediately. Increasing cover mid-policy is usually straightforward — the insurer adjusts your premium for the remainder of the year. It's better to increase cover before starting the job, not after a claim occurs.

Q: Do I need to add subcontractors to my policy?
Depends on the policy. Some policies automatically cover subcontractors working under your direction on your jobs. Others exclude subcontractors. Check your policy wording. If subcontractors aren't covered, require them to carry their own public liability — and get a certificate of currency before each job.

Q: I work from home and rarely visit client sites — do I still need PLI?
If you're providing any service to clients — even advisory or management — and those clients could suffer loss as a result, PLI is worth having. A client who receives defective advice from a home-based tradie-consultant and suffers loss can still bring a claim. The injury/damage doesn't have to occur on your premises.

Q: Can I get PLI as a casual or part-time tradie?
Yes. Most insurers will provide PLI for part-time and casual trade work, though the premium calculation changes. Declare your actual annual revenue accurately — even for part-time work, the consequence of a liability event is no less severe.