Business insurance for builders

How can business insurance help builders? 

From managing multiple job sites and contracts to handling employees and clients, you’ve probably got a lot on your plate as a builder. And that’s not to mention many of the risks that simply come with the territory. Consider risks such as accidents, equipment theft, or projects that encounter unexpected issues. Business insurance could provide protection tailored to these and other potential challenges. 

Luckily, there are several types of business insurance for builders that could protect you and your business against those risks.  

What are the different types of business insurance? 

With so many insurance options to choose from, the choice 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 member of the public, like a client or a supplier, is injured or has their property damaged as a result of your business activities.  

Let’s say someone is walking past your construction site and a rogue brick hits their brand-new smartphone. Public liability insurance may cover some or all of the costs of replacing or repairing the item, subject to the policy’s terms and conditions.  

Professional indemnity insurance 

As a builder, you’re hired for your services. But what happens if a mistake or error in your services lead to a problem? 

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

A good example would be if you provided building plans to a client, which then led to structural problems in their newly built home. 

Portable equipment insurance 

If you have portable equipment insurance (also known as general property insurance), it provides coverage for loss and damage to items of portable equipment associated with your business. 

It can also cover things like accidental damage and vandalism. 

Personal accident and illness insurance 

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. 

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

Is business insurance mandatory for builders? 

This really comes down to the kind of insurance we’re talking about, the job you’re undertaking and where you live. But there are numerous types of insurance builders might need. 

Across several states, certain insurance is mandatory for builders. In NSW, for example, residential building projects over $20,000 must be insured under the Home Building Compensation Scheme. On the other hand, builders in Victoria need to have domestic building insurance for works over $16,000. You might also be required to take out public liability insurance to work on job sites.  

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 & 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. 

*BizCover currently doesn’t offer domestic building insurance or workers’ compensation insurance. 

What are some common exclusions for business insurance? 

Exclusions depend on the specific insurance policy you choose. Always review your Product Disclosure Statement (PDS) to understand what is and isn’t covered.  

But generally speaking, the following items are excluded: 

• Fraudulent or deceptive conduct
• Clerical or accounting errors
• Vehicles that are stolen while unattended
• Keys to valuables are not kept in a safe or properly secured
• Some natural disasters, like flood damage (this may depend on the policy) 
   

Helpful tip from BizCover

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.

How much will builders pay for business insurance? 

Depending on your insurance needs, you can get a rough idea of your costs in the example table below. We’ll break down insurance types and builder’s requirements to give you a guide on what you could be looking at.  

What common mistakes should builders avoid? 

Before you take the plunge with a policy, you’ll want to think about a few things. Not doing so could cost you (literally). 

1. Overlooking business insurance  

Remember that whatever advice or services you dish out become your liability if something goes wrong. 

2. 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.

3. 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.

4. Assuming all risks are covered 

You can’t assume that every risk of the job falls under your policy. Check the fine print to make sure you’re adequately covered (and then maybe check it again to make doubly sure).

Where can I find and compare business insurance for builders? 

Right here! In partnership with BizCover, we provide a comparison tool to help you explore business insurance policies from a selection of leading providers. 

This information is general only and does not take into account your objectives, financial situation, or needs. It should not be relied upon as advice. Insurance services are provided by BizCover Pty Limited under its Australian Financial Services Licence (AFSL 501769). iSelect acts as a white-label partner of BizCover, facilitating access to insurance products. As with any insurance, cover will be subject to the terms, conditions, and exclusions contained in the policy wording. 

© 2024 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769