Public liability insurance requirements for builders
Public liability insurance covers third-party injury or property-damage claims arising from the work — it's a separate, commercial policy from the home warranty insurance covered elsewhere in this guide, and it's commonly required by licensing bodies and head contractors rather than by one single national law.
This page is general information only, based on publicly available sources as at the date this page was last reviewed (see the sources listed further down this page for that date). It is not legal, compliance, or insurance advice, is not exhaustive, and may not reflect the most current requirements -- regulations, licensing rules, and insurance thresholds change, and requirements can vary by project, site, and contract. Always verify current requirements directly with the relevant state or territory regulator, your insurer, or a qualified advisor before relying on anything here.
What does public liability insurance cover?
Public liability insurance covers third-party injury or property-damage claims arising from the work — a tool left on a walkway that someone trips over, a power tool that damages a neighbouring property, a member of the public injured near the site. It's a commercial policy a builder or subcontractor takes out themselves, separate from the project-level statutory schemes (home warranty, building indemnity, or whatever a given state calls its version) covered on each of our state guides.
Why is public liability insurance required?
There's no single national statute that sets one minimum public liability cover amount for every builder in Australia. Instead, the requirement comes from two directions that together make it close to universal in practice: many state licensing bodies require evidence of current cover as a condition of holding a trade or builder licence, and separately, head contractors and principal contractors routinely require subcontractors to hold their own cover — often at a level the head contract specifies — before starting on site. Cover levels commonly seen in Australian construction contracts sit around $5 million, $10 million, or $20 million, but the actual minimum for a given job depends on the specific licensing body and head contract, not a fixed national figure.
What is a certificate of currency?
A certificate of currency is the document an insurer issues confirming a policy is currently active, including the cover amount and the expiry date. This is usually what a head contractor actually asks a subcontractor to produce — not the full policy wording — and it's the document that needs re-checking each time cover is renewed. Tracking certificates of currency against their real expiry dates, rather than assuming last year's copy is still valid, is exactly the kind of check that's easy to let slip without a system in place.
This page was last reviewed on 1 October 2026. See the full sources list of WHS regulators and licensing bodies for every state and territory.
Frequently asked questions
Is public liability insurance legally required for every builder in Australia?
There's no single blanket national law mandating a specific minimum for every builder. Instead it's typically required as a condition of holding a trade or builder licence in a given state, and separately required by head contractors or principal contractors as a condition of working on their site -- the combination has the practical effect of making it close to universal in the industry.
What's a certificate of currency?
A document an insurer issues showing a policy is currently active, including the cover amount and expiry date. Head contractors commonly ask subcontractors for a current certificate before allowing them on site, and again whenever it's due to expire.
Does public liability insurance cover defective workmanship?
Generally, no -- public liability insurance is designed to cover third-party injury or property-damage claims arising from the work, not the cost of rectifying your own defective work. That's a different kind of protection, closer to what home warranty or building indemnity schemes (and sometimes professional indemnity insurance) are for. Check the specific policy's terms rather than assuming either way.
How much public liability cover does a subcontractor actually need?
There's no single national minimum. Cover levels commonly seen in Australian construction contracts sit around $5 million, $10 million, or $20 million, but the specific figure a subcontractor needs depends on what the relevant state licensing body requires and what the head contract specifies -- always check both rather than assuming a common figure applies.
Who pays for public liability insurance -- the builder or the subcontractor?
Each party typically holds and pays for its own public liability cover. A head contractor's policy generally doesn't extend to cover a subcontractor's own work, which is exactly why head contracts commonly require subcontractors to hold and prove their own current cover before starting on site.
What happens if a subcontractor's insurance lapses mid-project?
Practically, the subcontractor is usually not meant to continue working until cover is reinstated, since the head contractor is relying on a current certificate of currency. See our explainer on what happens if a licence lapses for the broader regulatory, insurance, and contractual risk categories involved -- similar reasoning applies to a lapse in insurance.