Business insurance is not one policy. Most Australian businesses need a mix of cover types based on what they do, who they work with, whether they employ staff, what assets they own and what their contracts require. Some cover may be required by law. Some may be required by a client, landlord, tender, licence, platform or professional registration. Other cover may not be mandatory, but may still be worth checking because one claim, accident, cyber incident or property loss could seriously affect the business.
The simple way to think about it is that the right business insurance depends on what could go wrong in your business, who could make a claim, what assets you need to protect and what cover your contracts require.
This guide explains the main types of business insurance in Australia, when each one may apply, and where to go next for deeper cover-specific guidance.
Quick Answer: What Are the Main Types of Business Insurance?
The main types of business insurance in Australia include public and products liability, professional indemnity, business pack, cyber insurance, workers compensation, commercial motor, management liability, tools of trade, personal accident and sickness, and marine cargo.
Most businesses do not need every type of cover. The right mix depends on your staff, contracts, customers, assets, vehicles, data, services and industry requirements.
Main Types of Business Insurance in Australia
| Insurance type |
What it may help cover |
When to check it |
| Public and products liability |
Third-party injury or property damage from business activities or products |
You work with customers, clients, suppliers, contractors or the public |
| Professional indemnity |
Claims from advice, services, designs, errors or omissions |
You provide advice, professional services, reports, care, treatment or designs |
| Business pack |
Property, stock, contents, theft, glass, business interruption and other packaged covers |
You have premises, stock, equipment, contents or a fit-out |
| Cyber insurance |
Data breaches, ransomware, business email compromise, cyber interruption and response costs |
You use email, cloud systems, customer data, online bookings or payments |
| Workers compensation |
Employee injury or illness connected to work |
You employ staff |
| Commercial motor and fleet |
Business vehicle damage and third-party property damage, subject to policy |
You use vehicles for work |
| Management liability |
Claims involving directors, officers, employment disputes, regulators or governance |
You run a company, employ staff, have directors or manage people |
| Tools of trade |
Tools and portable work equipment |
You rely on tools or gear to do your work |
| Personal accident and sickness |
Income support if injury or sickness stops you working |
You are a sole trader, contractor or self-employed business owner |
| Marine cargo |
Goods in transit by road, sea, air or rail |
You import, export, ship or move goods |
This table is a starting point only. Your actual cover mix depends on your occupation, business activities, contracts, employees, revenue, assets and insurer appetite.
Is Business Insurance Legally Required in Australia?
Business insurance requirements usually come from three places: law, contracts and practical risk. Some cover may be legally required. For example, workers compensation may be required if you employ staff. CTP or third-party personal injury insurance is required for registered vehicles. Public liability may be required for some occupations in some states or territories. Professional indemnity may also be required for certain professions, registrations or licences.
Contracts can create separate requirements. A landlord may ask for public liability. A head contractor may require workers compensation. A client may ask for professional indemnity. A tender may ask for cyber insurance. A venue, market or council may ask for a Certificate of Currency.
Then there is risk-based cover. This is cover you check because one event could hurt the business. A tradie may check tools cover. A retailer may check stock and contents cover. A consultant may check cyber cover. A sole trader may check personal accident and sickness cover.
The best approach is to ask, what does the law require? What do my contracts require? What could financially hurt the business if it happened?
What Is Public and Products Liability Insurance?
Public and products liability insurance may help cover third-party injury or property damage claims connected to your business activities or products, subject to policy terms.
Public liability may be relevant if people visit your premises, you visit client sites, or your work could cause injury or property damage to someone else. Products liability may be relevant if your business sells, supplies, imports, manufactures or installs products.
This cover is often checked by trades, retailers, hospitality businesses, market stallholders, cleaners, beauty businesses, events businesses, health and support businesses, and sole traders. It is not required by one general law for every Australian business, but it is often requested in leases, tenders, venues, council permits, site-access requirements and client agreements.
What Is Professional Indemnity Insurance?
Professional indemnity insurance may help cover claims that your advice, services, designs, recommendations or professional work caused a client financial loss, subject to policy terms.
This cover is different from public liability. Public liability is usually about third-party injury or property damage. Professional indemnity is usually about financial loss from professional work. Professional indemnity may be relevant for consultants, IT contractors, designers, engineers, bookkeepers, allied health professionals, support workers, coaches and other service providers. Some professions may also need it because of registration, licensing or contract requirements.
Learn more:
What Is Business Pack Insurance?
Business pack insurance may combine property, stock, contents, theft, glass, equipment breakdown, business interruption and other business covers into one packaged policy, depending on the insurer and policy.
This cover is usually more relevant if you have a shop, cafe, clinic, salon, office, warehouse, stock, fit-out, contents or equipment. Think of it this way: public liability is about claims from other people. Business pack is about your own business property and interruption risks, subject to the policy.
Learn more: Business Pack Insurance
What Is Cyber Insurance?
Cyber insurance may help with costs from cyber incidents such as data breaches, ransomware, business email compromise, cyber extortion, data recovery and cyber-related business interruption, depending on the policy.
Cyber insurance is not only for technology companies. Many small businesses use email, cloud software, online bookings, payment systems or customer databases. That can create cyber exposure. Some businesses also need to consider cyber reporting obligations. Under the Cyber Security Act 2024, businesses with annual turnover exceeding $3 million (and certain critical infrastructure entities) must report ransomware or cyber extortion payments to the ASD within 72 hours of making the payment.
This does not make cyber insurance mandatory for every business, but it does make cyber incident planning more important for businesses that may be captured.
Learn more:
What Is Workers Compensation Insurance?
Workers compensation insurance may help cover wages, medical expenses and rehabilitation if an employee is injured at work or becomes ill because of work, subject to the relevant state or territory scheme.
Workers compensation is generally required if your business employs staff. The rules differ by state and territory. This is different from personal accident and sickness insurance. Workers compensation is for employees. Personal accident and sickness cover may be considered by sole traders, contractors or self-employed people who are not covered by workers compensation for their own injury or sickness.
What Is Commercial Motor Insurance?
Commercial motor insurance may help cover business vehicle damage and third-party property damage from vehicle use, depending on the policy. CTP is separate.
CTP or third-party personal injury insurance is required for registered vehicles, but it generally does not cover damage to your vehicle, another vehicle, property, tools, stock or equipment in the vehicle. Commercial motor or fleet insurance may be relevant if your business uses vehicles for deliveries, trades, mobile services, client visits, transporting goods or multiple drivers. Business use can also affect personal car insurance, so check the policy wording if you use a personal vehicle for work.
What Is Management Liability Insurance?
Management liability insurance may help protect the business, directors, officers or managers from certain claims connected to how the business is managed, subject to policy terms.
Depending on the policy, it may include cover for directors and officers liability, employment practices claims, statutory liability, employee dishonesty, regulatory investigations or certain tax audit costs. This cover is usually more relevant once a business has employees, directors, investors, a board, external stakeholders or more governance responsibility. It is different from professional indemnity. Professional indemnity is about services you provide to clients. Management liability is about how the business is run.
What Other Business Insurance Types Should You Check?
Some cover types apply to more specific situations.
Tools of trade insurance may be relevant if you rely on tools or portable equipment to do your work. This often applies to tradies, cleaners, technicians, installers and mobile service providers. Learn more: Tools of Trade Insurance.
Personal accident and sickness insurance may be relevant if you are a sole trader, contractor or self-employed business owner without paid sick leave or workers compensation for yourself. Learn more: Personal Accident and Sickness Insurance.
Marine cargo insurance may be relevant if you import, export, ship or move goods by road, air, rail or sea. Learn more: Marine Cargo Insurance.
Which Business Insurance Should You Check First?
Use this table as a decision map. It is not a final recommendation, but it can help you work out where to start.
| If your business... |
Cover to check first |
Why |
| Employs staff |
Workers compensation |
Employee injury and illness are handled through state and territory workers compensation schemes. |
| Deals with customers, clients or the public |
Public liability |
A third party could claim your business caused injury or property damage. |
| Sells, supplies, imports or installs products |
Products liability |
A product could cause injury or property damage after it leaves your business. |
| Gives advice, treatment, designs or services |
Professional indemnity |
A client could allege your work caused financial loss. |
| Owns stock, tools, contents or equipment |
Business pack, tools or property cover |
Physical assets can be stolen, damaged or destroyed. |
| Uses vehicles for work |
Commercial motor or business-use vehicle cover |
CTP generally does not cover vehicle or property damage. |
| Uses email, cloud systems, payments or customer data |
Cyber insurance |
Cyber incidents can involve invoice fraud, data breaches, ransomware or downtime. |
| Has directors, employees or governance risk |
Management liability |
Claims may arise from employment disputes, directors' duties, regulators or internal crime. |
| Operates as a sole trader |
Public liability, professional indemnity, tools, cyber, personal accident and sickness |
Sole traders may have personal income and liability exposure. |
| Moves goods |
Marine cargo |
Goods may be lost or damaged while in transit. |
Common Starting Points by Business Type
These examples show how the cover mix can change by business type. They are starting points only, not recommendations.
Insurance for Sole Traders and Consultants
A sole trader or consultant may start by checking public liability, professional indemnity, cyber insurance and personal accident and sickness cover. Sole traders should pay close attention to personal income and liability risk because they do not have company-style separation between the individual and the business.
For a deeper guide, see sole trader business insurance in Australia.
Insurance for Tradespeople
A tradesperson may start with public liability, tools of trade, commercial motor, workers compensation if employing staff, and business pack if they have premises, stock or equipment. Site access, contract limits, tools and vehicles are common insurance triggers.
Insurance for Retail and Hospitality Businesses
A retail or hospitality business may check public and products liability, business pack, workers compensation and cyber insurance. Customer foot traffic, stock, premises, POS systems and staff can all create different risks.
Insurance for Healthcare, Allied Health and NDIS Businesses
A healthcare, allied health, NDIS, disability support or care business may check professional indemnity, public liability, cyber insurance, workers compensation and commercial motor if transporting clients. Client care, sensitive records and transport all need to be considered separately.
Insurance for Technology, SaaS and Professional Services Businesses
A technology, SaaS or professional services business may check professional indemnity, cyber insurance, management liability and public liability. Client contracts often focus on advice, data, errors, systems and governance.
Insurance for Beauty and Wellness Businesses
A beauty or wellness business may check public and products liability, professional indemnity, business pack and cyber insurance. Treatments, products, equipment, premises and client records may all matter.
Insurance for Construction and Building Businesses
A construction or building business may check public liability, workers compensation, tools of trade, commercial motor and contract-required cover limits.
Insurance for Ecommerce Businesses
An ecommerce business may check products liability, cyber insurance, stock or business pack cover, marine cargo and professional indemnity if it sells advice, design or digital services.
Common Business Insurance Mistakes
Avoid these common mistakes:
- assuming every business needs the same cover;
- buying only the policy a landlord or client asked for;
- confusing public liability and professional indemnity;
- assuming personal car insurance covers business use;
- forgetting cyber because the business is “not a tech company”;
- ignoring contract-required cover limits;
- not updating cover when the business changes;
- choosing a quote without checking exclusions.
A cheaper quote is not always the better fit if it excludes the risk your business is most likely to face. For a step-by-step buying process, see how to buy small business insurance.
How upcover Can Help
upcover arranges business insurance for Australian sole traders and small businesses with selected insurers and underwriters.
Depending on your occupation and eligibility, upcover may be able to help arrange cover such as public and products liability, professional indemnity, cyber insurance, business pack, management liability, workers compensation, commercial motor and fleet, tools of trade, personal accident and sickness, and marine cargo insurance.
You can get a quote online, compare available cover options, and receive a Certificate of Currency on policy confirmation where available. Start with your occupation. Then check the cover your contracts require and the risks that could stop your business from trading.
Frequently Asked Questions
What are the main types of business insurance in Australia?
The main types include public and products liability, professional indemnity, business pack insurance, cyber insurance, management liability, workers compensation, commercial motor, tools of trade, personal accident and sickness, and marine cargo insurance.
What business insurance is legally required in Australia?
Workers compensation may be required if you employ staff. CTP or third-party personal injury insurance is required for registered vehicles. Some occupations, professions, licences, leases or contracts may also require specific cover.
Is public liability insurance mandatory?
Public liability is not required by one general law for every Australian business. However, some occupations in some states or territories may need it, and it is often required by contracts, leases, councils, markets, venues, tenders or licence conditions.
What is the difference between public liability and professional indemnity?
Public liability may respond to third-party injury or property damage claims. Professional indemnity may respond to claims that your advice, services or professional work caused financial loss, subject to policy terms.
What insurance does a sole trader need?
It depends on the work. Sole traders often check public liability, professional indemnity, tools cover, cyber insurance and personal accident and sickness cover. Contracts may also require specific cover or limits.
What insurance does a small business usually start with?
Start with workers compensation if you employ staff. Then check public liability, professional indemnity, business pack, cyber insurance and any cover required by contracts, leases or licences.
What is the best type of business insurance?
There is no single best type of business insurance for every business. The right cover depends on your business activities, contracts, employees, assets, vehicles, data and risk exposure. A tradie may start with public liability, tools and commercial motor, while a consultant may start with professional indemnity and cyber insurance.
Is business insurance tax deductible in Australia?
Business insurance premiums may be deductible where they are incurred in carrying on your business or earning assessable income. Section 8-1 of the Income Tax Assessment Act 1997 allows deductions for losses or outgoings to the extent they are connected with assessable income or carrying on a business. Tax treatment depends on the policy, business use and your circumstances, so confirm with a registered tax agent or accountant.
How do I compare business insurance quotes?
Compare more than price. Check limits, exclusions, sub-limits, excesses, policy wording, retroactive dates, waiting periods and whether the policy matches your business activities.
The information in this article is general in nature and provided for informational purposes only. It does not constitute personal insurance, legal, financial, tax or business advice. It does not take into account your objectives, financial situation or needs. Insurance requirements vary by occupation, industry, state, territory, licence, contract and business circumstances. Cover depends on the policy wording, limits, exclusions and insurer appetite. Before purchasing or relying on an insurance product, consider the relevant Product Disclosure Statement, Target Market Determination, policy wording and Financial Services Guide. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.
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