Construction is one of the highest risk industries in Australia. From on site accidents and property damage to weather events and theft, every project carries potential financial risks. This makes construction insurance essential because it protects builders, subcontractors, and property owners if something goes wrong.

So how much does construction insurance actually cost in Australia? The answer depends on several factors such as your project size, business operations, and the type of insurance you choose. This guide explains the key cost factors and outlines the two most common types of construction insurance. These are Contract Works Insurance and Public Liability Insurance.

Understanding Construction Insurance Costs

There is no single set price for construction insurance. Instead, premiums are calculated based on risk exposure, project value, and specific coverage needs. For most small to medium builders in Australia, annual premiums generally range from a few hundred to several thousand dollars depending on the scope of work.

Common Factors That Influence Cost

Project size and value
Larger or high value projects typically attract higher premiums.

Type of construction work
High risk activities such as roofing or demolition cost more to insure than lower risk trades like painting or tiling.

Number of workers and subcontractors
More workers increase the chance of incidents which can raise insurance costs.

Annual turnover
Higher turnover can indicate increased risk exposure and may result in higher premiums.

Claims history
A history of previous insurance claims can increase future premium costs.

Project location
Sites located in areas prone to storms, flooding, vandalism, or theft may incur higher insurance rates.

1. Contract Works Insurance

Contract Works Insurance protects the physical project itself. It covers the building, materials, and work in progress if they are damaged or lost due to events like fire, storms, vandalism, or theft.

What Contract Works Insurance Covers

• Damage to the building or construction site
• Theft or vandalism of materials
• Fire, storms, floods, and other natural disasters
• Tools and equipment if included
• Temporary structures such as scaffolding and site offices

Average Cost of Contract Works Insurance

For small to medium builders, Contract Works Insurance typically starts from around 800 to 2,500 per year. Costs vary based on project size, contract value, and the level of cover required. Larger commercial builders or those with continuous project cover will pay more.

Why Contract Works Insurance Is Important

Many construction contracts require builders to provide proof of Contract Works Insurance before work begins. Without it, you may be held financially responsible for damage or loss during construction.

2. Public Liability Insurance

Public Liability Insurance is essential for anyone working in the construction industry. It protects your business against claims from third parties who may suffer injury or property damage as a result of your work.

What Public Liability Insurance Covers

• Third party injuries
• Damage to third party property
• Legal fees and compensation payouts

Average Cost of Public Liability Insurance

Small construction businesses generally pay between 500 and 1,500 per year for public liability cover with limits ranging from 5 million to 10 million. High risk trades or larger builders may pay more. For a deeper explanation, read our full article: Public Liability Insurance Cost

Why Public Liability Insurance Is Essential

Public liability insurance is often mandatory for tradespeople, subcontractors, and builders. It also helps protect your business reputation and financial stability if an incident occurs.

Combined Construction Insurance Packages

Many builders and tradespeople choose to combine Contract Works Insurance and Public Liability Insurance in a single package for convenience and broader protection.

Example Combined Package

A small residential builder might pay:

• 1,200 to 1,800 per year for combined Public Liability and Contract Works
• 2,000 to 3,000 or more per year if adding tools, plant, or equipment insurance

Why Choose Morgan Insurance Brokers for Construction Insurance

Navigating construction insurance can be complex. Working with a specialist broker ensures you receive the right level of cover at a competitive price. Morgan Insurance Brokers are experts in construction and trades insurance, offering tailored solutions based on your project requirements and risk profile.

Why Builders Trust Morgan Insurance Brokers

• Access to a wide network of Australian and international insurers
• Expert insurance advice for builders, subcontractors, and tradespeople
• Comprehensive cover options including Contract Works, Public Liability, Tools, and Plant Insurance
• Full support from policy setup through to claims assistance

Morgan Insurance Brokers understand the unique risks of the construction industry and ensure you have the protection that matters most.

Conclusion

The cost of construction insurance in Australia varies widely depending on your business type, project scale, and required coverage. Investing in the right insurance protects your business from unexpected financial losses and helps ensure every project proceeds with confidence.

For most builders and tradespeople, combining Contract Works Insurance with Public Liability Insurance provides strong and reliable protection.

For tailored quotes and expert support, contact Morgan Insurance Brokers today. Their construction insurance specialists can assess your needs and secure the most suitable cover at the best price.

Protect your next build and request a personalised construction insurance quote from Morgan Insurance Brokers, a specialist construction insurance broker.