If you’re a contractor, subcontractor or freelancer, you face a variety of work risks – and without an employer to cover the costs, unforeseen events can pose a real threat to your livelihood.
Whether you work in trades, digital services, finance, healthcare or another industry, business insurance helps protect your income and assets, giving you peace of mind so you can focus on delivering your services.
What types of insurance should I buy for my contracting business?
The business insurance you need as a contractor depends on the type of work you do, whether you have employees and the risks involved in your day-to-day operations. A sole trader working online, for example, faces very different risks to a tradesperson on a building site or a nurse providing in-home care.
In some cases, you will be legally required to hold certain types of insurance:
Workers compensation insurance
If you employ any workers or staff, you’ll need to have workers compensation insurance. It covers your employees if they suffer a work-related injury or illness, including medical expenses and lost income.
If you’re a sole trader with no employees, you usually won’t need workers compensation – but you also won’t be covered if you’re injured. Personal accident and illness insurance can cover you in this case, though there is no legal requirement to take it out. This insurance can provide cover for lost income if you’re unable to work due to injury or sickness.
In certain circumstances, a contractor can be considered a ‘deemed worker’ under state legislation, meaning the business engaging them may need to cover them under workers compensation insurance.
Public liability insurance
Public liability insurance covers claims for injury to third parties or damage to their property caused by your business activities. It’s particularly relevant if you work on construction sites, visit client premises or perform physical work where someone could be injured or property could be damaged.
In some cases, you will be required to take it out. For example, in Queensland, building contractors are typically contractually obliged to take out public liability cover.
Professional indemnity insurance
Professional indemnity insurance covers claims for financial loss, injury or damage resulting from negligence, errors or breaches of professional duty when providing services.
This is important if you provide advice or professional services, and a legal requirement in many roles, including health practitioners, lawyers, accountants and mortgage brokers.
Other common types of insurance include:
- Cyber liability insurance: this covers financial losses and reputational damage resulting from data breaches, cyber attacks or other cyber incidents. It can be valuable if you handle sensitive client data, store personal information or operate online systems.
- Product liability insurance: this covers claims for injury or property damage caused by products you manufacture, supply or sell. This may be relevant if your contracting business provides physical goods as part of its services.
Small business insurance package
As a contractor or freelancer, you could also look at a small business insurance package, which lets you combine different types of cover – such as protection for your equipment, premises, stock or income – into a single plan that fits your needs.
The table below shows common types of cover you can include, depending on what suits your business.
| If your business has… | You may need… | What it covers |
|---|---|---|
| A physical shop, office or warehouse | Building cover | Damage to buildings you own |
| Stock, tools, fixtures or fittings | Contents cover | Loss or damage from insured events |
| Stock or equipment vulnerable to theft | Theft cover | Loss or damage to property due to theft or attempted theft |
| Equipment you take off-site | Portable equipment cover | Loss or damage to tools and gear |
| Expensive machinery | Machinery breakdown cover | Repair or replacement if it fails |
| Computers and electronic systems | Electronic equipment breakdown cover | Repair or replacement of business electronics |
| Goods it regularly transports | Goods in transit cover | Loss or damage while being transported |
| A heavy reliance on trading income | Business interruption cover | Lost income after an insured event |
How much will a contractor's business insurance policy cost?
There’s no fixed cost for business insurance and prices vary depending on the size of your business, your industry, the types of cover you choose and your claims history.
According to BizCover, these are typical monthly insurance costs for a range of contractor and freelance roles:
| Role | Estimated monthly cost |
|---|---|
| Builder | $132 |
| Carpenter | $79 |
| Electrician | $96 |
| Plumber | $124 |
| IT consultant | $84 |
| Accountant | $83 |
| Bookkeeper | $35 |
| Architect | $96 |
| Freelance writer | $52 |
| Source: BizCover, accessed February 2026 | |
Example: Freelance accountant
Consider a sole-trader accountant with no employees, an annual turnover of $80,000, and a mix of virtual and on-site client work. They work with sensitive client data and rely heavily on computers and IT systems. As an accountant, they are also legally required to have professional indemnity insurance.
The accountant can expect to pay $166–$279 per month on business insurance for professional indemnity, public liability and cyber liability cover. Here’s what the cost breakdown looks like:
- Professional indemnity insurance: $2 million cover costs between $53–$146 per month.
- Public liability insurance: $10 million cover costs between $30–$44 per month.
- Cyber liability insurance: $250,000 cover costs from $83–$89 per month.
Prices are indicative only and will vary based on individual circumstances, risk profile and insurer. Figures sourced from BizCover, February 2026.
Why compare business insurance policies through Savvy?
How to get business insurance as a contractor
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Apply through Savvy
We’ll connect you with our business insurance partner, BizCover.
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Choose the insurance you need
Add the types of cover you might need to cover your work risks as a contractor.
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Provide your details
Give information about your business and the cover amounts you want.
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Compare quotes
You’ll have a range of insurers and cover options to choose from.
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Get covered
Choose the package that best suits your needs as a contractor or freelancer.
Business insurance tips for contractors
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Match your cover to your growth
As your business expands, make sure your insurance grows with it. More clients, higher revenue, bigger projects or entering new industries can all increase your risk exposure.
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Adjust for equipment upgrades or changes
New machinery, vehicles or tools increase the value of what you need to protect. If you sell or retire equipment, you may be able to reduce your cover.
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Factor in new services or work locations
If you start offering services you didn’t previously or work at more sites, you may need to adjust your cover to reflect these changes.
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Don’t forget subcontractors or employees
Hiring staff or subcontractors can change your legal obligations and insurance requirements, such as mandatory workers’ compensation insurance if you have employees.
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Keep records up to date
Keep records of your equipment, property and business activities to avoid issues if you need to claim.
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Compare insurance regularly
Insurance markets and products change, even if your business hasn’t. Comparing policies annually can find you better cover or pricing.
