Key Takeaways:
- Workers Compensation protects your employees if they get hurt or sick from work. It’s legally required in WA and across Australia if you have staff, though how it’s arranged varies by state.
- Public Liability protects your business from claims by clients, visitors or anyone on or around the site if they are injured or their property is damaged because of your work.
- Many tradies need both: Workers Comp covers your team, Public Liability covers others on or around the site.
- Subcontractors usually need their own cover. They aren’t automatically included under your policies.
- Skipping cover can leave you exposed to fines, legal costs or massive out-of-pocket expenses.
- All Trades Cover helps you get the right mix of cover for your trade, crew size, and job types, and can arrange Workers Comp directly in WA and NT.
Running a trade business in Australia comes with its fair share of risks. But when accidents happen, do you know which insurance has your back?
Workers Compensation protects your team. Public Liability protects everyone else.
Sounds simple, right? Not always. A lot of tradies confuse the two and end up underinsured, especially when it comes to state-specific rules like WA’s
So let’s clear it up once and for all. What each one covers, where the limits are, and when you’ll need both to keep your business fully protected.
What is Workers Compensation insurance?
Workers Compensation (often called ‘Workers Comp’) is insurance that protects your employees if they get hurt or become ill because of their work. Basically, if a worker gets hurt or sick at work, they’re looked after. And you’re not left paying out of pocket.
Think of it this way. If someone slips on your worksite, strains their back lifting a beam, or develops an illness from repeated exposure to dust or chemicals, Workers Compensation steps in to cover the following:
- Medical expenses and treatment
- Rehabilitation costs
- Lost wages while your worker is off
- Lump-sum payments for serious injuries
Who needs it?
In Australia, if you have employees, you’re required by law to have Workers Compensation. The rules vary slightly by state; some use private insurers, others operate under state-managed schemes.
If you’re based in Western Australia, Workers Compensation is governed by the Workers Compensation and Injury Management Act 2023 (WA) and regulated by WorkCover WA. The system is specific, and getting things like classifications, wage estimates, and forms right from the start is key to staying compliant.
If you’re not, that doesn’t mean we’ll leave you high and dry. Our team will work with you to point you in the right direction so you know exactly what to look for.
Example
Imagine a carpenter injures their shoulder while cutting timber on-site. Workers Compensation will cover their medical bills and a portion of their lost income while they recover.
What is Public Liability Insurance?
Public Liability Insurance is different to Workers Compensation. It’s all about other people, not your employees. It’s there to protect your business if something you do, or something on your site, accidentally causes harm to someone else or damages their property.
It covers things like:
- A client or visitor slipping on your tools or materials
- Accidentally damaging a neighbour’s property while using heavy equipment
- Legal costs if someone makes a claim against you
Who needs it?
Public Liability isn’t legally required in the same way as Workers Compensation. But it is essential if you want to win work or step on most job sites. In fact, many clients, councils and head contractors won’t even consider a quote without it.
Example
Suppose you’re an electrician working on a commercial site. A loose cable trips a visitor, causing them to break their wrist. Public Liability insurance takes care of the medical and legal expenses.
Workers’ Compensation and Public Liability Insurance — What’s the difference?
It’s easy to confuse the two, especially if you’re new to running a trade business. Here’s the simple breakdown:
| Aspect | Workers Compensation | Public Liability |
|---|---|---|
| Covers | Injuries or illness to your employees | Harm to third parties or their belongings caused by your work |
| Legal requirement | Mandatory if you have employees | Not mandatory, but often required by clients |
| Examples | Employee slips on site, muscle or joint injuries, illness caused by on-site chemicals | Client trips over your tools, ladder scratches a neighbour’s car, paint spills on a client’s decking |
| Doesn’t cover | Injury or damage to anyone other than your employees | Injuries to staff, your own tools or property, faulty work |
When do you need both insurance policies?
For many Australian tradies and small business owners, having both Workers Compensation and Public Liability insurance makes sense. Here’s when:
- You’ve got a crew: Workers Comp is mandatory for your team. While Public Liability gives you extra protection if someone else gets hurt on or off-site.
- You’re on client sites or dealing with the public: Accidents can affect both your team and others around you. Having Workers Compensation and Public Liability insurance together keeps everyone covered and protects your business.
- You run bigger jobs with subcontractors: Workers Compensation covers your employees, but subcontractors aren’t always included under Public Liability insurance. The right mix of cover depends on your setup. Talk to All Trades Cover to make sure you and your team are fully protected.
If you’re operating in WA or NT, your Workers Comp needs to meet local legislation, and we can help you tick every box. Our team works directly with WorkCover WA-approved insurers to keep your business compliant.
Example
An electrician has two apprentices and works in clients’ homes. Workers Compensation covers the apprentices if they get injured, while Public Liability insurance protects against accidental damage to the property or any claims the client might make.
Everyday trade scenarios: How Workers Comp and Public Liability work together
Here’s a few real-life examples showing how both Workers Compensation and Public Liability insurance can come into play on the job:
Builders
One of your crew trips over a stack of timber and twists their ankle. That’s Workers Compensation. Later, a scaffold falls and scratches the client’s car; that’s a job for your builder’s Public Liability insurance.
Plumbers
Your apprentice plumber cuts their hand while handling tools — Workers Compensation. In that case, you’d be relying on your plumber’s Public Liability insurance to cover the damage.
Electricians
One of your electricians gets a minor shock while wiring a panel, which is covered by Workers Compensation. Meanwhile, a dropped tool scratches the client’s hardwood floor. That’s where your electrician’s Public Liability insurance comes into play.
Protect your crew and your business with right cover
Accidents happen. Having Workers Compensation and Public Liability insurance together means your team is looked after and your business is protected, no matter what goes wrong.
At All Trades Cover, we help tradies and small business owners get the right mix of cover for their trade, crew size, and risk profile. We speak your language, know the ins and outs of Australian worksites, and make sure you’re not paying for extras you don’t need.
Don’t leave your business exposed. Get in touch with All Trades Cover today and make sure you, your crew, and your clients are fully protected.
Frequently Asked Questions
- Do subcontractors need their own insurance?
Usually, yes. Subcontractors are generally not covered under your Workers Compensation or Public Liability policies. They’re considered separate businesses, so they’ll need to arrange their own cover to stay protected and to meet site requirements.
- What’s the risk of not having either Public Liability or Workers Comp cover?
Skip Workers Comp, and you’re breaking the law. It’s mandatory in Australia if you employ staff. And in places like WA, compliance is closely monitored by WorkCover WA. Getting caught without it can mean heavy fines, penalties, or even being shut down.
Go without Public Liability, and one bad accident could leave you coughing up massive repair bills and legal costs.
- How much Public Liability cover do I actually need?
It depends on the size of your jobs and who you work for. Most tradies go for $5–20 million in cover. But many councils, builders and government contracts have minimum requirements. The team at All Trades Cover can help you find the right level for your work.
- Does Public Liability Insurance cover employees?
No, it doesn’t. Public Liability is there to protect you if a client, visitor, or someone else on site gets injured or their property is damaged because of your work.
If someone on your crew gets hurt, that’s a Workers Compensation claim. You’ll need both policies to be fully covered, one for your team, one for everyone else.
- What’s covered by Public Liability in Australia?
In Australia, Public Liability Insurance typically covers injury to third parties, accidental property damage, and the legal costs that come with defending a claim. It’s essential for most tradies, especially if you’re working in public areas, homes, or commercial spaces.
