Can a Small Business Trade Without Insurance?

July 3, 2023
Small Business

For the vast majority of Australians, and for those who own their own trades business, insurance can often seem like a hassle which isn’t worth going through. For many, there is a misconception that insurance is an unnecessary cost, and one they can do without. However, the right insurance is a critical part of your business continuity approach, as it can help safeguard the future of your business in a wide variety of events.

So, let’s start with the simple answer to our main question. Can a business trade in Australia without insurance? Well, according to the Australian Government Business website, it depends on whether you employ workers or not:

  1. You employ workers
    No: If you have one or more employees, you legally must purchase worker’s compensation insurance.
  2. You do not employ workers
    Yes: As long as you have no employees, you are under no legal obligation to purchase insurance.

These requirements often surprise people, and can certainly be misleading when showing the benefits an accurate and comprehensive insurance package can have. Put simply, although there is no legal requirement for you to purchase insurance as a sole trader, it nonetheless plays an incredibly important part in protecting you and your business, and is something which should strongly be considered by all business owners.

Insurance often comes attached with a certain stigma, and also of course, a cost. That cost can vary depending on factors like your trade, your location, the level of coverage you need, as well as the number of policies you need.  For many, insurance is likely a begrudging buy, out of necessity rather than want. The current state of the economy in Australia also means insurance premiums are rising to keep up with inflation, so it is perfectly understandable why you as a small business owner may consider the cost to be too much. However, it is important to point out here that the cost of not having insurance could be even higher. In the event of an incident, you will be out of pocket, and may not have the funding necessary to deal with the consequences, and keep your business running.

Benefits of Insurance

Insurance can protect your business from all sorts of unexpected situations, including but not limited to, property damage, theft, injuries, and even legal costs. It helps to spread some of the risk in these situations, and provide a way for your losses to be repaid, as well as a way to keep your business running through hardship. If you have people depending on your income, i.e. family, accurate insurance also allows you to keep providing for them.  

There are different types of insurance that might apply to your business, depending on what you do and how you do it. Each of the following policies can drastically improve the security of your business, and provide an important financial backstop in case anything goes wrong.

  1. Public Liability Insurance
    Can cover you if someone sues you for personal injury or property damage. 
  2. Tools Insurance
    Can protect against theft, damage or loss if you have valuable equipment or stock
  3. Commercial Motor Insurance
    Covers theft, loss and damage to commercial and plant vehicles

So, can you trade in Australia without insurance? Legally, yes if you have no employees. But if you want to protect your business and those who depend on you, it’s a smart move to consider investing in some coverage. If you’re not sure where to start, our team of experienced brokers at imar can help you find the right policy for your needs. 

As always, your insurance is up to you. For great insurance and peace of mind, give us a call.

Let’s talk! There are 3 easy ways to get a quote for public liability insurance: 

  1. Call 1300 540 156 to speak to our dedicated tradie broker team
  2. Fill out our online Contact Our Experts form 
  3. Go online and fill out the Quote form



You should consider if the insurance is suitable for you and read the Product Disclosure Statement (PDS), Financial Services Guide (FSG) and policy wording before making a decision to acquire insurance. Please ask us for more details before we provide you with our services. Our FSG is available on our website.

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