Going Out on Your Own? What Changes With Your Insurance When You Leave Your Employer
You've got your licence, you've built up a list of people who want you, and you've handed in your notice. Going out on your own is one of the biggest steps a tradie takes, and most of the planning goes into the work itself: the ute, the tools, the quoting, the ABN.
The part that catches people out is insurance. As an employee, a lot of it was quietly handled for you. Your employer's public liability covered your work. WorkCover covered you if you got hurt. The business insured the gear and the work vehicle. The day you start trading under your own ABN, all of that becomes your responsibility.
This guide covers what changes, what you need in place before your first job and the gaps new tradies most often miss. For the full range of cover available to trade businesses, see our Trade & Construction Insurance page.
What Your Employer Was Covering (That Stops on Your Last Day)
As an employee | Once you're trading on your own ABN |
Your employer's public liability covered damage or injury caused by your work. | You need your own public liability before you start your first job. |
WorkCover paid your wages and medical costs if you were hurt at work. | Sole traders aren't covered by WorkCover, so no work means no income unless you arrange your own cover. |
The business owned and insured the tools, or covered them on its policy. | Your tools are your own, and so is the risk if they're stolen. |
The work vehicle was on a business policy. | Your ute may still be insured for private use only and needs to be placed on a commercial motor policy. |
Head contractors checked the business's paperwork, not yours. | Builders and property managers will ask for your certificate of currency. |
The Big One: WorkCover No Longer Covers You
This is the change most new tradies don't realise until they need it. WorkCover Queensland's own guidance is clear that sole traders, partners and directors aren't covered by its standard accident insurance for workers.
That means if you tear a shoulder on a Monday, there's no workers' comp claim and no sick pay. Your income stops while your bills keep coming.
There are two main ways to protect your income:
Personal accident and illness insurance from a private insurer. It pays a weekly benefit if injury or illness stops you working, and many policies cover you 24 hours a day, not just on the job.
WorkCover Queensland's voluntary policy for sole traders and directors. It covers work-related injuries only, so it suits some tradies better than others.
The right choice depends on your age, your trade and what you'd need each week to cover the mortgage and the business. For a closer look at how personal accident cover works, read Personal Accident Insurance in Australia: What It Covers, What It Doesn't & Who Actually Needs It.
Before Your First Job: The Three Covers to Sort First
1. Public liability Most builders, real estate agents and commercial clients won't let you on site without it. Check what limit your first clients require. Many ask for $10 million or $20 million, and showing up with the wrong limit can cost you the job. Make sure the policy describes all the work you'll do, not just your main trade.
2. Income protection for you As above. Set this up in your first week, not after your first injury. Personal accident policies usually have a waiting period before benefits start, and they won't cover an injury that happened before the policy did.
3. Tools and equipment Add up what your gear would cost to replace at today's prices. Most new tradies are surprised by the total. Then check whether the policy covers tools left in a locked ute overnight, because some don't.
The Gaps New Tradies Miss
Your ute is still on a private policy. If you're using it to carry tools and travel between jobs, tell your insurer it's now used for business. A claim made while the vehicle is used in a way you haven't declared could be reduced or declined.
You quoted the job before the cover started. Public liability needs to be in place when the work happens. Don't let the start date of your first job sneak ahead of your policy.
Your policy lists your trade too narrowly. If you're a carpenter who also does small tiling or decking jobs, your policy needs to say so.
You've hired a hand. The moment you take on a worker, even casual, you generally need a WorkCover policy in Queensland. That's separate from any cover for yourself.
You signed a contract without reading the insurance clause. Head contracts can require specific limits or ask to be noted on your policy. Check before you sign.
A Quick Example
A carpenter leaves a Brisbane building company after eight years and starts trading as a sole trader. He arranges public liability so he can start work for a builder he's worked with before, and puts off everything else for a few months to save money.
Six weeks in, he injures his back lifting a bundle of timber. He's off work for two months. As an employee he would have claimed through his employer's WorkCover. As a sole trader with no personal accident cover, he has no income for the full recovery period, and the builder gives his next two jobs to someone else.
The public liability was the cover his clients asked for. The cover he needed most was the one nobody asked him to show.
Your First-Week Insurance Checklist
Public liability arranged, with the right limit and every activity listed
Personal accident and illness cover, or WorkCover's voluntary policy, in place
Tools insured at today's replacement value
Ute moved to business use with your insurer
Certificate of currency saved to your phone for clients and builders
WorkCover policy arranged before you take on any worker
Insurance clauses checked on any contract before you sign
Planning to go out on your own? 📞 Call 1300 130 463 🌐 Get a free policy review →
Monarch Insurance Brokers Pty Ltd is an Authorised Representative (AR Number 001322399) of Morgan Insurance Brokers Pty Ltd, authorised with ASIC under AFSL 700265. This article contains general information only and does not take into account your objectives, financial situation or needs. Before acting on any information here, consider whether it is appropriate for your circumstances, read the relevant Product Disclosure Statement and seek personalised advice.
