Rates are influenced by factors like insurer competition, insurer appetite, global reinsurer costs, inflation and claims activity and costs. According to Marsh’s Mid-Year Insurance Market Update 2025, more competition has returned to the market, helping to stabilise premiums across some insurance classes.
Industry factors that impacts tradies insurance pricing and coverage in Australia
Running a trade business comes with its fair share of ups and downs, from chasing invoices to making sure your gear and people are protected. One area tradies often notice shifting each year is the cost of insurance, but they may not understand why.
It’s been five years since COVID-19 first hit Australia, and many people might think that the biggest challenges are behind us. While the worst of the pandemic is over, its effects are still felt in the trades/construction world and will likely be around for years to come.
The pandemic caused big disruptions not just here in Australia but around the world. For the trades and construction industry, this meant that demand for building projects slowed down sharply when the economy took a hit. Supply chains were also affected—materials, equipment, and parts were harder and more expensive to get, which slowed down or even halted some projects altogether.
The good news is that since that challenging period, the industry has mostly recovered and bounced back to pre-pandemic levels of activity. But the impact of those difficult times can still be felt by many Australian tradespeople, smaller construction businesses as well as the insurance market. Businesses have had to find new ways to work safely and stay on top of risks that are now more unpredictable. This has led to the development of smarter and tailored insurance solutions to help manage evolving challenges and keep projects moving smoothly.
The market for tradies insurance covering builders, plumbers, electricians and other tradespeople is growing steadily. More tradies are now looking for insurance coverage that fits their specific needs, rather than one-size-fits-all solutions.
Public liability insurance premium trends
Liability insurance pricing began to decrease in the last quarter of 2024. This trend continued into 2025, with average premium rates in Australia decreasing in the range of 2% to 5% during the first half of 2025.
What actually impacts commercial insurance rates in Australia for tradies, and why does the price of cover sometimes rise or fall? Let’s unpack the main influences, using insights from Marsh’s Australian Mid-Year Insurance Market Update 2025.
The big market influences
Insurance pricing doesn’t move randomly, it’s influenced and shaped by global and local insurance market developments and factors that flow through to tradies at renewal. These include:
Coverage and underwriting trends tradies should know about
When it comes to key insurance trends that could impact your business, it’s not just about price. Coverage and insurer appetite (i.e. the type of risk insurers are willing to take on) are also changing:
- Exclusions for hazardous materials are tightening. Silica dust and PFAS are increasingly being excluded from policies, however the underwriting approach has been varied among insurers.
- Higher policy excesses are being applied for injury claims, particularly involving subcontractors. This means that if an injury occurs under your supervision or on your worksite you could be responsible for a bigger part of the costs (i.e. the excess).
- COVID-19 related policy wording still remain in some policies, so it’s important for tradies to check their policy schedules carefully to understand what’s covered/excluded for anything related to the pandemic.
- Sustainability matters: Cover for eco-friendly tools and building materials is emerging, reflecting growing focus on green practices.
How tradies are buying insurance today
Tradies are adjusting their insurance buying habits in response to market changes as well as business and budgetary pressures. Some tradies are cutting back on “nice to have” but non-essential cover (such as property or equipment protection), and instead, investing in the essentials they can't do without, (such as liability and personal accident insurance). Discretionary purchases are being delayed as tradies and construction businesses shift their focus to what is critically necessary.
Tradies are also looking for customised insurance options. Insurers are increasingly using digital solutions and technologies to provide faster, more personalised service to meet growing customer expectations.
Among our Marsh clients, we have observed some common purchasing behaviours in 2025:
Behaviour |
What’s driving it? |
Bundling policies |
Simplifying and streamlining the renewal process, potential premium savings by combining liability, tools and vehicle cover. |
More policy engagement |
Tradies are reviewing declarations and policy wording more carefully, paying closer attention to what they’re declaring financially. They are now more invested in the quotations and/or solutions being presented to them. |
Digital-first approach |
Increasing demand for online quotes and mobile policy management for ease of accessibility. |
Downsizing cover |
Some tradies are managing costs by focusing on the essentials only. |
These trends have given us insights into how tradies are becoming more proactive and intentional in tailoring cover to match their business needs, rather than simply renewing the same policy and cover each year.
Claims trends putting pressure on insurance pricing for tradies
One of the key claims developments for tradies in Australia is the rise in claims linked to materials. Given the economic environment, many businesses are turning to cheaper imported materials to keep costs down. However, these products can fail under Australian weather conditions, leading to more repair claims and increased costs for both tradies and insurers.
Additionally:
- Building costs in Australia have risen by about 29% since 20191, with materials now around 30% higher than three years ago2.
- Over the past year alone, construction costs rose by 2.93%.
These external pressures flow directly into insurance claims and costs for insurers and ultimately impact premium rates which get passed onto insureds.
Top 4 insurance renewal tips for tradies
When your insurance comes up for renewal, here are four ways to stay ahead of the curve:
- Start early. Obtaining quotes and comparing options take time. Allow yourself and your broker plenty of time for the decision-making process.
- Review your cover. It’s important to ensure your policy matches your current work activities, tools, vehicles, projects and associated risk exposures. If you’ve changed materials or equipment, or the nature of your work, your insurance cover may also need updating.
- Show your risk management. Insurers respond well to businesses that can demonstrate safe practices and quality control as these help to reduce risk. Provide detailed information about your risk management practices during your renewal.
- Consider bundling. Combining multiple covers under one streamlined policy can often ease administration and reduce overall premium costs.
Conclusion
Insurance pricing for tradies in Australia is influenced and shaped by many moving parts – from global market trends to insurer appetite to economic and industry conditions, as well as local claims activity. The good news is that insurer competition is returning, giving tradies more choice at renewal to compare different policies and negotiate with insurers to ensure the right level of cover at the best price.
Have questions?
See our FAQs below, find out more about our Tradie insurance arranged by Marsh or get an online quote now.
Frequently asked questions
Public liability insurance, tools and equipment cover and personal accident insurance are core protections that most tradies would need. Depending on your trade, professional indemnity insurance or vehicle insurance may also be essential. Speak to your broker to get a better understanding of what is suitable for you.
Due to a rise in claims activity, higher excesses are being applied where subcontractors or contracted workers are involved. This shifts some upfront costs back to the insured to help insurers manage costs, particularly for smaller but frequent claims that fall under the policy excess. By applying higher excesses (i.e. shifting more costs back to the insured) this makes the risk more acceptable for insurers and reduces their exposure. This may lead to terms being offered where otherwise the risk may have been declined.
Insurers are tightening exclusions on risks like silica dust and PFAS chemicals due to health and environmental concerns. Tradies working in areas where these are present should review policy wording carefully to understand exactly what is and isn’t covered.
Rising costs of building materials and labour are key factors. Costs have risen 29% since 2019, with materials about 30% higher than three years ago. These increases make claim costs more expensive, which can affect premiums.
Insurance claims related to cheaper imported building materials are on the rise. These products can fail under Australian conditions, leading to higher repair costs and more claims.
Start early, review your cover carefully and show insurers you’re managing risks well. Businesses that can demonstrate quality safety measures and the use of reliable materials are often better positioned to achieve better renewal results.
Marsh can provide easy, fast cover for tradies both online or arranged via a broker. We’re trusted by over 130 associations to arrange insurance solutions across a wide range of industries. Marsh brokers can not only help tradies to understand the insurance they need for their business but can also provide claims advocacy, using their expertise in the event of a claim leaving tradies to focus on their business.
References
1 https://www.abs.gov.au/articles/home-building-through-pandemic#construction-costs-increased
2 https://www.abs.gov.au/articles/insights-output-building-construction-prices
3 https://www.cotality.com/au/press-releases/construction-costs-up-on-previous-quarter-complicating-rbas-path-forward
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