In the early days of running a trade business, $5 million or $10 million in public liability cover might have ticked the box. But if your team is growing and you are chasing bigger jobs, that cover might not stretch far enough anymore.
Let’s break down why more tradies are shifting to $20 million liability cover, and how the right policy can make or break your next contract.
What Is Public Liability Insurance?
Public liability insurance protects you if something goes wrong on the job and causes damage or injury to someone else. Whether it’s a cracked driveway, a fallen scaffold or an injured passer-by — this insurance is there to cover legal costs, compensation and more.
It’s not just a good idea, it’s usually mandatory. Most licences, building contracts, and worksites (especially government ones) will ask to see your certificate of currency before you are allowed through the gate. It’s one of the most important protections a tradie can have.
Why $5M or $10M Was Enough… Until Now
Not long ago, $5 million was the go-to limit. Then, as job complexity grew, $10 million became the industry standard. Now? $20 million is becoming the new normal, especially for tradies scaling up.
Here’s why:
- Bigger clients (think businesses, councils, schools, hospitals) often won’t even look at your quote unless you carry $20 million in public liability.
- Larger sites and projects come with more risk — and more eyes watching.
- A growing team means more hands on deck… and more chances for things to go wrong.
The bottom line? The more you grow, the more exposure you carry and that means higher stakes.
Real Jobs Where You Will Need More Cover
If you are stepping into these types of projects, $10 million may not cut it anymore:
- Commercial jobs for other businesses – factory upgrades, office fit-outs, warehouses, retail refurbishments
- Council or government work – schools, parks, aged care facilities, local infrastructure
- Shopping centres or commercial developments
- Multi-res apartment projects
- Busy public spaces – footpaths, hospitals, childcare centres
- High-risk tasks – working at heights, near powerlines, or structural modifications
These jobs usually require $20 million liability cover just to be eligible — it’s a non-negotiable, not a maybe.
What If You Don’t Have Enough Cover?
Here is where things can get risky. Let’s say there is a claim worth $12 million, but you have only got $10 million in liability. Guess who is on the hook for the remaining $2 million? You are.
And public liability claims are not quick. Some can drag on for years with lawyers, court appearances, and mounting costs, all eating into your limit. Worse still, some policies include legal defence costs within the limit, meaning your cover gets chewed up before the case is even resolved.
On top of that, plenty of clients won’t even award you the job if your insurance limit is too low. They simply move on to someone who ticks all the boxes.
Does $20 Million Cover Cost a Fortune?
Not at all. In most cases, increasing your limit to $20 million only adds a few hundred dollars a year, depending on your trade, team size and turnover.
That small jump can open doors to better-paying, high-profile jobs and it gives you peace of mind that if something serious happens, your business is protected.
Think of it as an investment in your growth, not just an extra bill.
Final Word: Get Advice That Fits Your Business
Here’s the catch: not all public liability policies are built the same. Some have hidden exclusions, like:
- Height limits (which could void claims if you work above a certain level)
- No cover for labour hire or subcontractors
- Strict location or work restrictions
This is where an experienced tradie insurance broker becomes your best mate. At Be Covered Insurance, we don’t just tick boxes — we dig deep. We will check your current limits, spot any weak points and help structure your policy for where your business is going, not just where it is now.
Ready to grow your team and take on bigger jobs?
Let’s make sure your insurance grows with you. Chat with Be Covered Insurance today and get cover that won’t let you down when it matters most.
When Real-Life Claims Go Beyond the Usual Limits
Here are a few industry examples where the standard $5M or $10M simply wasn’t enough:
Crane Collapse – Sydney Construction Site
- Payout: Estimated $15–20M+
- What happened: A tower crane collapsed during installation at a major development site, damaging neighbouring buildings and injuring several workers.
- Claim type: Property damage, injury, business interruption
- Outcome: Multiple liability claims and lawsuits were filed against the crane contractor and head builder.
- Takeaway: Large-scale accidents can quickly exceed standard liability limits — especially when third parties or neighbouring businesses are involved.
Apartment Complex Fire – Electrical Contractor Blamed
- Payout: $10M+ (ongoing litigation)
- What happened: Faulty electrical work by a contractor caused a fire that spread through multiple units of an apartment complex.
- Claim type: Major property damage, loss of rental income, class action from owners
- Outcome: The spark started in one apartment but led to multi-party legal action and a potential claim exceeding $10M.
- Takeaway: Even one subcontractor’s mistake can trigger massive claims, and insurers will pursue recovery.
Building Defect + Cladding Lawsuit
- Payout: Over $20M (shared across multiple parties)
- What happened: Defective cladding and poor workmanship led to a building being deemed unsafe, requiring full replacement of cladding and major rectification works.
- Claim type: Construction defect + financial loss to owner
- Outcome: Builder, developer, and key trades (including the cladding contractor) were all pursued.
- Takeaway: Cladding exclusions in policies are common now because of these multi-million dollar exposures.
Not sure if your current cover matches the scale of the work you are quoting? Speak to a construction insurance broker who understands your trade. No sales push – just honest advice so you are not left exposed. That’s where we come in. Be Covered, properly.
Call us for a chat and honest advice from a team that knows the industry.
