Insurance and licence conditions that actually get contractors in trouble

The jobs that end a contracting business are rarely the ones the owner would pick as their hardest. They are a supervisor who took a role in the mines and was never taken off the licence, a public liability policy written in the sole trader's name after the company was registered, a Facebook post that said "licensed electrician, no job too small" when the only ticket in the pocket was a worker licence, or a solar claim that died on an exclusion for work over two storeys. None of that requires a difficult reading of AS/NZS 3000. It requires reading the conditions that came with the contractor card, and the schedule that came with the policy.

This is a practical account of those conditions. It is not a product comparison and it does not invent sums insured or premiums. Energy Safe Victoria and the Electrical Safety Office publish minimum public liability figures as licence conditions; those figures can move, and the current instrument is the source. Insurers publish exclusions that move faster than that. Read both.

Public liability, professional indemnity and workers compensation are three different promises

Contractors bundle the word "insurance" the way civilians bundle the word "sparky". It sounds like one thing. It is at least three.

Public liability is the cover regulators talk about when they talk about contractor licences. Energy Safe Victoria requires a Registered Electrical Contractor to hold current public liability insurance of at least $5 million against personal injury and property damage in connection with the electrical contracting work, in the name of the entity that is registered, whenever the REC is carrying out or offering to carry out that work. Offering is the word that surprises people. The policy has to be in force when the advertisement is live, not only when the first isolation happens. Queensland's Electrical Safety Office requires public and products liability with a limit of at least $5 million and consumer protection insurance of at least $50,000, in the legal name of the licensed business, covering among other things liability from testing and certification. Other jurisdictions impose insurance through contractor licensing, building licensing, or both. NSW Fair Trading and Building Commission NSW, SA Consumer and Business Services, WA Building and Energy, TAS CBOS, Access Canberra and NT WorkSafe each publish their own contractor conditions. Check them. Do not assume a Victorian $5 million condition is the Queensland condition, or that a NSW building-licence condition covers an electrical-only company.

Public liability is the policy that responds when a customer, a visitor or a neighbouring tenant is injured, or when property is damaged, because of the contracting work. Fire following a loose termination, a shock from a re-energised circuit, a ceiling collapsed by a poorly supported cable tray — those are public liability conversations. They are also, separately, electrical safety conversations. The policy does not make the work lawful.

Professional indemnity responds to a different loss: the purely financial kind that follows a design or advice error. The board you specified will not accept the generation isolation the distributor now requires. The cable schedule you signed under-sizes a submain. The client has to rip out and redo, and they want the difference. Public liability will often not meet that claim, because nothing caught fire and no one was injured. Contractors who design — and anyone who signs a CEC or SAA design is designing — need to know whether they hold PI, what it says about electrical design, and whether the excess and the retroactive date are usable. Many small contractors do not hold it. That is a commercial choice until the day it is not.

Workers compensation is statutory. If you employ anyone — including, in most states, an apprentice, and in some arrangements a labour-hire worker you control — you need the state scheme policy. WorkSafe Victoria, WorkCover Queensland, icare in New South Wales, ReturnToWorkSA, WorkCover WA, WorkSafe Tasmania, the ACT scheme and NT WorkSafe do not treat "he's subcontracting to himself" as a clever structure. A contractor licence condition can require you to hold this cover. A serious injury will require it whether the condition mentioned it or not. The nominated supervisor being off the books as a contractor, while on the tools as if they were staff, is how this explodes.

Products liability, consumer protection cover, and tools-of-trade or motor policies sit around these three. Queensland writes consumer protection into the contractor insurance condition for a reason: a public liability policy that excludes defective workmanship leaves the customer with nothing when the defect is the whole claim. If your state requires that cover, a cheap public liability certificate that does not mention it is not compliance. It is a document that will fail the first audit.

The nominated supervisor is a licence condition, not a courtesy title

Every contractor licence in the country is built on a named individual who holds the worker ticket. Victoria requires a technical supervisor and a business supervisor; they may be the same person. Queensland requires a qualified technical person and a qualified business person, endorsed on the contractor licence. New South Wales requires a nominated qualified supervisor on a company or partnership contractor licence, holding an individual contractor licence or qualified supervisor certificate in the same categories. South Australia, Western Australia, Tasmania, the ACT and the Territory each require an equivalent nominated person.

The condition fails in ordinary ways.

The supervisor resigns, or is stood down, or goes labour-hire, and no one files the form. NSW requires the company to tell Building Commission NSW within seven days if it does not have a nominated supervisor, and the supervisor to tell them within seven days of leaving. Stay empty for more than thirty days without consent and the licence may be cancelled. Energy Safe Victoria requires notification of a supervisor change within ten business days. Other regulators are not more relaxed; they are quieter on the website.

The supervisor is still named, but they are not in a position to supervise. They are in another state, on long-service leave, or running a second company. Effective supervision is a licensing duty. It is also, in Victoria, a REC duty to keep a register of licensed workers employed, available for inspection. A supervisor who cannot name the apprentices on the tools this week is not supervising them.

The supervisor's own worker licence lapses. The contractor licence does not magically supply a worker ticket. If the only QTP's electrical work licence expires, the contractor has no one authorised to perform or supervise the work.

The company adds a class of work — solar, refrigeration electrical, or a specialist category — and the supervisor does not hold it. NSW is explicit that you may need more than one nominated supervisor to cover the categories on the company licence. One A Grade does not cover a class they do not hold.

When the condition fails, the contracting entity is offering electrical work it is no longer authorised to offer. Certificates issued in that window are a problem. Insurance issued in that window may be a problem, because some policies require the insured to be licensed. The rectification is administrative and urgent: stop taking work that needs the missing class, notify, and put an eligible person in the chair. It is not "we'll sort the paper when she gets back from leave".

Records are how you prove the conditions were met

Regulators who investigate a fire or a shock ask for the certificate, the test results, the licence, the insurance certificate of currency, and the employment record of the person who did the work. Contractors who keep those things in a glovebox, a dead phone and a bookkeeper's email are not ready.

Keep, and be able to produce:

• current worker licences and contractor licences, and the last register search
• the nominated supervisor approval and the date they started
• the register of licensed workers and apprentices, where the local rules require one
• certificates of currency that show the legal name of the insured entity, the activity, the limit, the period, and any notable exclusion
• workers compensation policy details
• certificates of compliance and the underlying test results, for the retention period the regulator specifies
• quotes, variations and the written scope, especially where another trade was supposed to stop at disconnect/reconnect
• SWMS and isolation records for the work you actually did

Energy Safe Victoria requires the REC number on advertisements, notices and statements. Other regulators have advertising rules under Australian Consumer Law and under their own licensing Acts. If the ad does not carry the number, the ad is evidence. If the ad offers a class you do not hold, the ad is evidence of a different offence.

Do not invent a retention period. The local Act or regulation states it. The practical rule is longer than you think, because a defect can take years to present and a civil claim longer than that.

Advertising as a contractor without the contractor licence

This is the condition that generates the most "I didn't know" conversations, and the least sympathy.

An electrician's licence authorises the holder to carry out electrical work. It does not authorise them to contract with the public for that work, to employ others to do it, or to trade as "Smith Electrical" on a website. The contractor licence or REC is the authority to sell. A worker who moonlights on weekends, invoices in their personal name, and posts before-and-after photos of switchboards is contracting. If they do not hold the contractor authority, they are contracting without a licence.

The same is true of a company that holds no contractor licence and trades through a director's individual ticket. The director may be licensed. The company that issued the invoice may not be. Insurers notice this, because the policy is in one name and the invoice is in another. Regulators notice it because the public register does not show the trading name as a contractor.

Labour-hire and "subbie" arrangements are the grey story people tell themselves. If you are advertising, quoting, buying the material, directing the work and invoicing the owner, you are the contractor. Calling the only licensed person on site a subcontractor does not move the licence condition. If they are your nominated supervisor, they need to be in a relationship the regulator accepts — employee, director, partner — not a casual who last visited in March.

Australian Consumer Law applies on top of the licensing Act. "Licensed", "insured", "master electrician" and "CEC accredited" are claims. If the contractor licence is expired, the public liability is in the wrong name, or the CEC installer number was retired in 2024, the claim is misleading. NSW Fair Trading still enforces that, alongside Building Commission NSW's licensing function. Other fair-trading agencies do the same.

Policy exclusions that do not wait for a claim to become famous

Brokers who understand electrical contracting will ask about heights, solar, live work, design, and the states you work in. Brokers who do not will issue a certificate of currency that looks fine in a tender register and fails on the first solar claim.

Heights and roof work. Some policies exclude work above a stated number of metres, or work on roofs, unless you have told them you do solar or you have paid for the extension. A rooftop PV job is roof work. So is a fascia light on a two-storey dwelling. If the exclusion is there, the public liability condition on your REC is not met for that job, even if the limit on the certificate is $10 million.

Solar, batteries and embedded generation. Inverter energy systems, DC work and battery energy storage are sometimes excluded from a generic trades policy, or limited to systems below a kilowatt figure. If you do that work, the policy has to say you do. Accreditation does not fill the gap.

Live work and work on or near energised equipment. AS/NZS 4836 and the local regulations already tightly limit live work. Some policies exclude it entirely, or exclude it unless a documented live-work permit exists. Doing isolation poorly and calling it dead is not the exclusion. Doing work you know is live, because the hospital would not take the board down, is.

Defective workmanship and your own product. Public liability often excludes the cost of rectifying your own work. That is why Queensland requires a consumer protection component, and why PI and a well-written warranty process matter. A fire that spreads to the house may be covered. The cost of re-doing the board you built may not.

Wrong insured name, wrong activity, wrong state. The REC is in the company name. The policy is in the director's name. The activity listed is "handyman" or "communications". The territorial limit is one state and the job is in another. Certificates of currency that do not survive a reading of the schedule are not certificates you should lodge with Energy Safe Victoria or the Electrical Safety Office.

Subcontractors and labour hire. Some policies cover the insured's liability for subcontractors; some require those subcontractors to hold their own cover and to be licensed. If your model is a van and three "subbies", read that clause before a claim does.

Contractual liability and indemnities. Builders' contracts often push liability onto the trade. Some of that is insurable. Some of it is a contractual assumption the policy excludes. Do not sign a hold-harmless clause because the commencement date is Monday.

None of these exclusions are a reason to skip a test, skip a licence, or work uninsured. They are a reason to tell the broker the truth about the work, and to refuse work the policy will not meet while the licence condition requires you to be insured for that work.

How this lands on a real job

A Victorian REC tenders for a warehouse lighting upgrade and a 40 kW rooftop system. The public liability certificate in the tender folder is $10 million, in the company name, current. The schedule, which no one in the builder's office reads, excludes roof work above 10 metres and excludes photovoltaic installation. The nominated technical supervisor is the director, who is on long service leave in Broome. The apprentices on site are being directed by a fourth-year. The Facebook page still says "CEC accredited".

Every one of those facts is a condition failure. The lighting upgrade might still be within the policy. The solar is not. The supervision is not. The advertising is not. If there is an incident on the roof, the licence condition, the policy and the accreditation claim will be read together, and none of them will help.

The fix is dull. Put a supervisor on the job who is on the licence. Get the policy endorsed for the roof and the PV, or decline the PV. Take the retired CEC claim off the page. Keep the certificates of currency, the licence search and the COES in the same job file. That is what "complying with licence conditions" looks like when it is not a slogan.

A practical checklist before you quote, advertise or start

• Confirm the contracting entity — the name on the invoice — holds a current contractor licence or REC in the state of the work, on the public register.
• Confirm the nominated technical supervisor (and business supervisor, QTP, QBP or qualified supervisor) is still engaged, still licensed, and still able to supervise this job.
• Confirm public liability is current, in that legal name, at or above the local minimum, and that the schedule actually covers the activity, the height and the state.
• If you design, or you sign SAA design documents, confirm whether professional indemnity exists and whether it covers that design.
• If anyone is employed, confirm workers compensation is current in the state of employment.
• Put the contractor number on the quote, the invoice and the advertisement where the regulator requires it.
• Do not advertise as a contractor on a worker licence, and do not advertise a CEC installer number as if it were current.
• Keep licences, certificates of currency, test results and CoCs where someone other than you can find them.
• If the supervisor leaves, notify within the statutory period and stop taking work you can no longer supervise.
• If the policy will not cover the job, do not do the job. Do not "just this once". The licence condition is the same on small jobs.

The licensing and compliance hub is the rest of this picture: who may do the work, what the Wiring Rules require, and what other trades may touch. Insurance and supervisor conditions are the part that looks like office work until the day they are the only thing the investigator wants to talk about. Treat them as part of the trade.