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  • Writer's pictureAmanda Bird

5 Insurance Types for Contractors and Subcontractors

Contractors may not be eligible for the same benefits as full-time, internal employees. However, that does not mean they have no need for insurance. If you are a business owner in Australia and are concerned about the level of insurance your contractors have, or if you work as a contractor, check out the essential types of insurance below.

Insurance Cover Your Contractors Need

Contractors have different needs from your internal employees. Although your contractors work for you, they also work for themselves, in a sense. After all, contractors are considered self-employed individuals. For that reason, their insurance needs may differ from a typical full-time employee or a business owner like you.

Here are the essential types of insurance that contractors need in Australia:

Workers Compensation Insurance

In Australia, your contractors must be covered by workers compensation. They should make sure to have this insurance before taking on any projects for your business. This will benefit your business should an accident happen. Workers compensation insurance in Australia is compulsory for all workers under the age of 85 who work for at least three hours a week for one month or longer for one employer.

Professional Indemnity Insurance

Most full-time employees or business owners have professional indemnity insurance. Professional indemnity insurance is important to ensure that both you and your business are protected from the mistakes or negligence of your contractors. If one of your contractors made a mistake that caused legal action or a claim against your business, professional indemnity insurance would protect you and your business from financial losses or lawsuits.

Property Insurance

Contractors will need some form of property insurance. Most Australian states require that property be covered by insurance. Most property insurance includes contents and liability cover, but it can also include cover against damage to other property, cover against workers’ compensation and a legal expenses policy, which provides cover against third-party claims or lawsuits.

Legal Advice Insurance

Your contractors may work for you and be covered by workers compensation insurance. However, they are still considered independent contractors. As a business owner, you should take precautions in case there is a legal issue with any of your contractors. Legal advice insurance can help you out if the worst should happen.

This insurance will protect you and your business from legal action by compensating you for legal fees, damages, or court costs. As a business owner, you probably don’t want to get stuck paying for legal action that a contractor may cause against your business. Legal advice insurance may be able to cover you.

Insurance against Data Loss or Compromise

If your business is online, it likely holds and processes information about other people and businesses. This information could be obtained through data breaches and data loss or compromise. If this happens, your business could face significant financial consequences.

Because of this, you may want to include a section in your contract with your contractors that requires them to have insurance to protect your business from losses caused by data breaches.

To avoid such business disruptions, you will want to educate your contractors on how to stay safe online and how to protect your data. This will keep your business’ sensitive information safer and allow you to focus on your business.


Contractors can be a vital part of a successful business. However, you need to protect your business, your interests, and your assets. Before hiring contractors, be sure to take into account the security of your business. This may require including language in your contract or making changes to your existing contracts.

New Wave Insurance is your partner when it comes to finding the right insurance vehicle for your business. You get that peace of mind you need whenever you work with us. We offer a personalised level of service that lets you look at all the suitable insurance options for you. Contact one of our Gold Coast insurance brokers for a second opinion or a free complimentary consult.

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