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• What is builders’ business insurance?
• What does business insurance for builders cover?
• What are the different types of business insurance for builders?
• Is business insurance mandatory for builders?
• What does business insurance for builders not cover?
• How much is builders business insurance?
• What common business insurance mistakes should builders avoid?
• Where can I find and compare business insurance for builders?

What is builders’ business insurance?

Builders’ business insurance isn’t a standalone insurance product; rather, it can be various types of business insurance that suit builders and construction businesses. Builders often require a group of policies, such as public liability insurance, portable equipment or contents insurance and professional indemnity insurance. These can be bundled to help protect a builder from common risks, including negligence claims, lost or stolen equipment and third-party property damage.

Some of these policies, like public liability insurance and professional indemnity insurance, are usually mandatory for builders depending on the builder’s scale, where they operate and the services they provide.

What does business insurance for builders cover?

Business insurance can help protect builders from the potential financial fallout that comes with risks such as on-site accidents, personal or third-party injuries, property damage, equipment theft and professional negligence. In such cases, it can cover legal and defence fees, compensation costs, loss of income and other unexpected financial losses.

As a builder, your day-to-day can involve anything from managing multiple job sites and building contracts to handling employees and clients – that’s a lot to have on your plate. It follows that an unexpected public liability claim, extended employee illness or business interruption can throw a spanner in the works. Luckily, business insurance can help protect you and your business against those risks.

What are the different types of business insurance for builders?

The standard types of business insurance available to builders include public liability insurance, professional indemnity insurance, portable equipment insurance and personal accident and illness insurance. The type of business insurance a builder gets usually depends on the risks they want protection from. For example, professional indemnity insurance is what a builder would get to help cover them if a building error results in financial loss for a client.

With so many insurance options out there, choosing the ones you want can be a little overwhelming. To save you precious time and effort – because both of those things are better spent on your projects – here’s a quick guide to the different types of insurance you could consider.

Public liability insurance

Public liability insurance offers coverage in case a third party, like a client, supplier or member of the public, is injured or has their property damaged as a result of your business activities.

Public liability insurance can cover compensation and medical costs as well as any legal and defence costs associated with third-party injury claims, say if a rogue brick catches a passerby on the shin, subject to the policy’s terms and conditions. It also usually includes product liability cover.

Professional indemnity insurance

Professional indemnity insurance helps protect you against losses claimed by a third party due to alleged or actual negligence or errors in your professional services or advice.

As a builder, you’re hired for your services. But what happens if a mistake or error in your services leads to a problem? A good example would be if you provided building plans to a client, which then led to structural problems in their newly built home. In instances like this, professional indemnity insurance can come in handy.

Portable equipment insurance

Portable equipment insurance (also known as general property insurance) helps provide coverage for loss and damage to portable tools and equipment your business owns, including mobile phones and photographic equipment.

It can also cover things like accidental damage and vandalism, but it won’t cover vehicles and trailers or damage to equipment caused by wear and tear.

Personal accident and illness insurance

Personal accident and illness insurance can assist in financially protecting you if you’re unable to work due to a bodily injury, like if you fall off a ladder and break your leg. It can also cover you if you are unable to work due to an illness.

It’s not something anyone would like to happen, but accidents are a very real risk when you’re a builder. You’re often working at heights and operating all kinds of potentially hazardous equipment.

It’s also worth considering other types of insurance such as management liability insurance, cyber liability insurance and statutory liability insurance to help ensure that you have all the coverage you might need. Bear in mind that any type of business insurance can have exclusions, limitations and conditions of cover. So, to avoid any surprises come claim time, go through your policy wording beforehand to make sure you fully understand a policy’s coverage.

Is business insurance mandatory for builders?

No, most business insurance policies are not mandatory for builders unless they’re needed to obtain licenses or are a legal requirement for builders in their state or territory or for certain types of jobs. In New South Wales (NSW), for example, registered builders are required to have professional indemnity insurance – the same goes for some builder occupations in the Northern Territory, Queensland, Victoria and Western Australia. Public liability insurance could also be a contractual requirement and builders might need to provide their certificate of insurance or certificate of currency before they can start working on a building site or as a contractor or subcontractor.

So, it really comes down to the kind of insurance we’re talking about, the job you’re undertaking and where you live. There are numerous types of insurance that builders or sole traders might need. Here are a few examples:

• In Victoria, builders need to have domestic building insurance (previously ‘builders’ warranty insurance’) for projects that cost more than $16,000.
• NSW builders or tradies must have home building compensation (previously ‘home warranty insurance’) for home building projects over $20,000.

Workers compensation is generally mandatory across Australia if you employ workers, though requirements may vary based on your location and business structure. This covers your employees if they have an accident or get sick while they’re working. You’ll need this if you hire workers anywhere in Australia, and you might also be covered by workers’ compensation if you’re an employee of your business. If you’re a sole trader, that’s where personal accident and illness insurance comes in.

Insurance requirements vary between states and territories, so check out the building administration in your state to find out what you need.

Note: While BizCover doesn’t currently offer domestic building insurance or workers compensation insurance, you can compare and find other types of business insurance offered by BizCover using our online comparison tool.

What does business insurance for builders not cover?

Some of the common exclusions builders can come across in their business insurance policies relate to breakdowns or normal wear and tear, faulty work, deliberate, fraudulent or dishonest actions, pre-existing issues or conditions and contractual liabilities. Exclusions depend on the specific insurance policy you choose. It helps to review your Product Disclosure Statement to understand what is and isn’t covered.

If you’re considering business insurance for your builder or construction business, also keep an eye out for the following common exclusions:

• bankruptcy
• theft by employees
• rust, mildew, mould, oxidation, moths, insects, vermin, dry rot, contamination or pollution
• vehicles and trailers
• product recall or refunds of professional fees
• liquidated or punitive damages.

Helpful tip

There’s a huge amount of variance between insurance premiums because a lot of factors go into figuring out how much you’ll pay. Factors influencing your premium include your business size, the specific risks associated with your work (e.g., residential vs. commercial construction), the coverage limit you choose, your excess amount and any additional coverage options.

Adrian Bennett

General Manager for General Insurance

How much is builders business insurance?

On average, builders can expect to pay around $132 a month for business insurance, according to BizCover’s customer data.¹BizCover’s Customer Average Monthly Payment Report is based on 1 July 2024 to 30 June 2025 and presented as a guide only. It may not reflect pricing for your particular business, as individual factors will apply. Of course, different builders can have varying levels of cover and present different levels of risk to the insurer – the higher the insurance risk, the higher the premium. Typically, a larger builder, with more employees, higher turnover, higher value equipment and a more comprehensive level of cover will pay more for business insurance.

Fictional scenario: 3 builders, three different insurance needs

Imagine 3 construction businesses operating at different levels.

• Builder A is a residential builder, employs around 70 people and uses an even mix of owned and hired equipment. The builder takes out only public liability and professional indemnity insurance. Based on their overall lower risk level, Builder A would pay a premium that’s on the lower end of the scale.
• Builder B does both residential and commercial projects, has a higher employee count of around 180 and owns most of their equipment. They went with a higher level of cover that includes public liability, professional indemnity and portable equipment insurance. Because of the higher risk, Builder B pays a higher premium than Builder A.
• Builder C is a large-scale commercial builder that employs close to 2000 people, has a high annual turnover and owns highly specialised (and expensive) equipment. They’ve chosen business insurance with the lot: public liability, professional indemnity, portable equipment, personal accident and illness insurance and management liability insurance. All of this adds up to Builder C paying the highest premium out of the three businesses.

Note: This fictional scenario is intended to show how different business circumstances and cover choices could affect premiums. The examples are indicative only and don’t represent quotes or guaranteed pricing. Actual premiums may depend on business circumstances, insurer criteria, policy terms and market conditions. It’s important to read the relevant Product Disclosure Statement and policy details before you make a decision.

What common business insurance mistakes should builders avoid?

Builders should avoid ignoring or underestimating their business’s insurance needs. This could be assuming that basic coverage with the cheapest premium would be adequate to protect their business on all fronts – in other words, underinsurance. Neglecting to update their insurance coverage in line with business changes and not staying on top of the exclusions and limitations outlined in the Product Disclosure Statement are some of the other mistakes to avoid.

Overlooking business insurance

Remember that whatever advice or services you provide can become your liability if something goes wrong – in which case business insurance can help back you up, subject to the policies’ terms and conditions.

Failing to update policies

As your business changes, your insurance should change along with it. You might start offering different services or employing more apprentices – whatever the change, it’s important to review your coverage too.

Underestimating coverage needs

The cheapest policy may seem good enough, but you may not have an adequate coverage limit. Ensure you find a good balance between coverage and affordability.

Assuming all risks are covered

You can’t assume that every risk of the job falls under your policy. For example, portable equipment insurance won’t cover your ute, but commercial motor insurance can.

Where can I find and compare business insurance for builders?

You can use an online comparison website to find and weigh up policies from multiple providers. In partnership with BizCover, we provide a comparison tool to help you explore a range of business insurance policies from a selection of leading providers.²This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as personal advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording or Product Disclosure Statement (available on BizCover’s website). Please consider whether the advice is suitable for you before proceeding with any purchase. Target Market Determination document is also available (as applicable). © 2026 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975 AFSL 501769