Starting a construction business is an exciting step, but it also comes with serious risk. Whether you’re launching a civil construction company, plumbing business, carpentry firm, or general building operation, the first thing you must get right is your insurance.

Construction is one of the highest-risk industries in Australia. One accident, damaged tool, or contract dispute can put a new business in financial trouble within days. The good news? With the right construction insurance setup, you can protect your business from unexpected costs and meet the requirements of builders, councils and commercial clients.

This step-by-step insurance checklist will guide you through exactly what you need before starting work.

Step 1: Public Liability Insurance (Mandatory for All Construction Businesses)

Public Liability Insurance protects your business if your work causes accidental injury or property damage to someone else.
It’s the first policy every new construction business must have.

Why new construction businesses need it:

• Most builders and councils won’t let you on site without it
• Covers claims from clients, other tradies, or the public
• Some contracts force subcontractors to take responsibility for all incidents onsite, even those not caused by them

Step 2: Contract Works Insurance (Crucial for Builders & Trades)

Contract Works Insurance protects the project you are working on from accidental damage.

It covers:

• Damage to the building works
• Materials and tools onsite
• Theft, fire, storms, flood (if included)
• Vandalism
• Collapse, accidental damage
• Delays caused by insured events

If you’re in building, carpentry, concreting, formwork, civil works, or renovations, this cover is vital.

Step 3: Tools, Plant & Equipment Insurance

Construction businesses rely heavily on tools and machinery. Losing them to theft or damage can stop your new business instantly.

This policy covers:

• Power tools
• Trailers
• Toolboxes
• Excavators
• Skid steers
• Tippers
• Attachments
• Small plant

It protects against theft, accidental damage, breakdown (optional), and rollover incidents.

If you hire machinery, ensure you have Hired-In Plant cover, many hire contracts make you responsible for any damage.

Step 4: Commercial Vehicle or Fleet Insurance

Your ute, van or truck is one of your most important business assets.

Commercial Motor Insurance covers:

• Accidental damage
• Theft
• Windscreen replacement
• Trade tools kept in the vehicle (if added)
• Signwriting
• Hail & storm

If you’re towing machinery or operating tippers or water carts, you’ll need a specialised commercial motor policy.

Step 5: Workers Compensation

Workers Compensation is mandatory if you employ anyone — even one apprentice or casual labourer.

It covers:

• Worker injuries
• Lost income
• Medical bills
• Rehabilitation

Step 6: Management Liability Insurance

Many new construction business owners don’t realise they can be personally sued for:

• WHS breaches
• Mismanagement
• Employee claims
• Fair Work allegations
• Subcontractor disputes

Management Liability Insurance protects the director(s) and the business itself.

This policy becomes essential as soon as you:

• Hire workers
• Begin managing subcontractors
• Take on commercial projects
• Handle WHS responsibilities

Step 7: Professional Indemnity Insurance (If You Give Advice or Design)

If your business provides:

• Plans
• Site layout advice
• Engineering input
• Project management
• Specification changes
• Surveying
• Inspections

…you may need Professional Indemnity Insurance.

Professional Indemnity Insurance protects your business from claims arising from advice or professional errors, even if you’re not officially an “engineer” or “designer.”

Step 8: Business Insurance Package (For Offices, Storage Sheds & Workshops)

If you operate from a workshop or commercial premises, consider a Business Insurance Package that covers:

• Contents
• Stock & materials
• Buildings
• Machinery
• Break-ins & vandalism
• Glass
• Money
• Portable tools

This is especially important if you store high-value items or materials at your office, orr shed.

Step 9: Review Contracts Before Starting Any Job

This is one of the most overlooked steps by new contractors.

Construction contracts often include clauses that make the subcontractor responsible for:

• All injuries onsite
• Damage caused by others
• Underground service strikes
• Delay costs
• Liquidated damages
• Indemnity for the builder

Before signing:
✔ Have the contract reviewed
✔ Ensure your insurance matches the contract requirements
✔ Check your policy limit is adequate

This protects you from claims that insurers may reject if the contract wasn’t disclosed.

Step 10: Partner With a Construction Insurance Specialist

A generalist broker may not understand complex construction risk.

A specialist construction insurance broker can:

• Review your contracts
• Recommend the right policies
• Help you meet builder/council requirements
• Avoid exclusions that could void your cover
• Assist you with claims
• Build a tailored package for your trade

Morgan Insurance Brokers works with:

• Builders
• Plumbers
• Civil construction contractors
• Earthmovers
• Electricians
• Carpenters
• Concreters
• All construction-related trades

Final Thoughts: Set Your Construction Business Up for Success

Starting a new construction business is exciting, but without the right insurance, one incident can shut down your operations before you even get off the ground.

By following this step-by-step insurance checklist, you can:
✔ Protect your assets
✔ Meet contract requirements
✔ Avoid uninsured losses
✔ Win bigger tenders
✔ Build long-term business stability

Need Insurance for Your New Construction Business?

Get advice from a specialist who understands the industry. Contact Morgan Insurance Brokers