No, sole traders don’t need workers’ compensation, or traditional WorkCover, unless they have employees. Sole traders who operate as a one-person operation are not legally required to register for WorkCover. This is because, in legal terms, you are not considered an employee of your own business—you are considered the business. 

Australia is a thriving sole trader economy, with 1.5 million businesses across the country reporting as sole traders or independent contractors. The decision to work as a sole trader comes with a slew of benefits, including being your own boss, working hours that suit you and your family, and receiving all of your business’s profits. On the other hand, working as a sole trader is a lot more responsibility than being an employee. As a sole trader, you are responsible for your business’s success or failure, as well as any unexpected bumps in the road. Often, this comes down to having the right business insurance for sole traders.

If you’re a sole trader starting out, understanding your rights, obligations, and workers’ compensation insurance for sole traders can be difficult. It’s essential to seek experienced legal advice to set your business up for success—not just when things are going right, but also when things go wrong. From workers’ comp for sole traders to public liability insurance for sole traders Australia, we can give you expert advice and guidance so you can make the best call.

At Revolution Law, we believe in putting people first. We’re not a big, impersonal firm—you’ll deal directly with knowledgeable workers’ compensation lawyers and personal injury lawyers in Brisbane who genuinely care about getting the best outcome for you. Whether you’ve been injured at your own business, or in your employer’s workplace, our team will fight to get the compensation and support you deserve.

We offer a no win, no fee guarantee, so you can pursue your case without financial pressure. With an impressive track record and a reputation for clear communication, compassion, and real results, Revolution Law is here to guide you every step of the way.

Today, let’s talk about workers’ compensation insurance sole trader—including WorkCover for sole traders, and what is legally required of you as business owner state-by-state.

What is WorkCover?

Traditionally, WorkCover is paid out to employees when they experience a workplace-related injury or illness. In Australia, employers are legally obligated to cover their employees with WorkCover if the employee experiences a loss of wages due to a health issue that occurred in the workplace, or because of the nature of the work. This payment can also include cover for medical expenses and rehabilitation, and may be paid as a lump sum or as a regular ongoing payment.

This payment applies to full-time employees, part-time employees, casual workers, and even contractors and sub-contractors, depending on the circumstances.

Does a sole trader need workers’ compensation?

There is a lot of confusion around sole traders’ workers’ compensation—both what business owners are entitled to, and what they are legally required to obtain.

If you don’t employ anyone, then you generally don’t need WorkCover as a sole trader. However, the moment you employ staff, you are legally obligated to get it. This is true no matter where you live in Australia.

Sole traders who work alone don’t receive WorkCover because, in legal terms, you are not considered an employee of your own business—you are considered the business.

Unfortunately, this also means you won’t be covered by workers’ comp and will need to rely on personal accident, income protection, or total and permanent disability (TPD) insurance if you want financial protection in case of injury or illness. You are responsible for your own health, and the health of your business, which is why it’s so important to take out the right insurance, with the right cover, from the beginning.

Sole trader insurance requirements by state

As you can probably guess, sole trader insurance requirements vary state by state. The requirements for workers’ compensation for sole traders NSW, for example, vary significantly from the sole trader insurance requirements QLD.

What happens if a sole trader gets injured at work?

Sole traders aren’t employees, which means they’re not covered under traditional WorkCover. That means no automatic wage replacement, medical expenses, or rehab support through the usual workers’ comp channels.

However, there are other ways to create workers’ compensation for sole traders, to ensure you and your business are protected:

·       Personal accident and illness insurance: This can help cover your income if you can’t work due to injury or illness, whether it happened on the job or not.

·       Income protection insurance: Offers a regular income stream while you recover, depending on your policy.

·       Private health insurance: Can help with medical bills or hospital stays.

·       Public liability insurance: While this won’t cover your personal injury, it’s useful if your work accidentally causes injury to someone else or damages property.

How to get WorkCover as a sole trader:

Because sole traders are essentially their own boss, they aren’t classified as “workers” under most workers’ compensation schemes. Instead of traditional WorkCover, you’ll need to look into alternative forms of protection.

Some of these options include:

·       Taking out personal accident or illness insurance, which can function as sole trader workers compensation insurance. This is one of the most common options for sole traders. It can provide weekly payments if you’re unable to work due to injury or illness, and sometimes even cover medical expenses.

·       Consider income protection insurance. This offers ongoing payments to help cover your living costs if you’re off work for a longer stretch due to a serious health issue.

·       Speak to an insurance broker – A professional can help tailor a plan that suits your work, lifestyle, and budget—whether you’re on the tools or working behind a desk.

While you can’t register for WorkCover for yourself as a sole trader, the good news is there are plenty of options (that can function as a kind of WorkCover sole trader) to make sure you’re not left vulnerable if something goes wrong.

Common misconceptions about WorkCover for sole traders:

1.      “I’m a sole trader, so I must be automatically covered by WorkCover.”
As a sole trader, you’re not considered an employee of your own business, so you’re not automatically covered by WorkCover. You’ll need separate personal insurance (like income protection or accident cover) to protect yourself.

2.      “I don’t have employees, so I don’t need to worry about any kind of insurance.”
Even if you work alone, you should still have protection in place. While workers’ compensation isn’t required for yourself, getting personal accident or income protection cover is a smart move in case you’re injured and can’t work.

3.      “If I hire a contractor, I don’t need to cover them under WorkCover.”
This one’s tricky. Some contractors may legally be considered ‘workers’ depending on how much control you have over their work, or if they mainly work for you. It’s worth checking your obligations with your state’s workers’ compensation authority.

4.      “WorkCover will cover me if I get hurt on a job site.”
Unfortunately, not true. WorkCover only covers registered employees. If you get injured on-site as a sole trader, you’ll need to rely on your own insurance policies for medical bills and lost income.

5.      “All states have the same rules around WorkCover for sole traders.”
Actually, each state and territory in Australia has slightly different rules, especially around who’s considered a worker, contractor, or employee. It’s important to check the regulations in your specific state.

6.      “WorkCover only matters if I’m doing dangerous work.”
Accidents can happen in any kind of work—whether you’re on a construction site or sitting at a desk. Even a simple injury could affect your ability to earn. This is doubly true if your job relies on rigorous physical fitness, so having the right protection is essential.

How can Revolution Law help?

If you’re a sole trader who has been injured at work, or an employee has been injured, and you’re unsure what comes next, we can help.

Backed by extensive experience and expertise, we’re dedicated to achieving the best possible outcome for our clients. If you or your loved ones need legal support on the Gold Coast, our personal injury lawyers are here to help.

FAQs

How do you protect yourself as a sole trader?

If you’re protecting yourself, and you have no employees who are eligible for WorkCover, then the best way you can protect yourself is to have good insurance. This insurance should cover you if something goes wrong in the workplace, but it should also reflect your position as a one person operation. Put more simply, make sure your income is protected by insurance if something prevents you from earning for any stretch of time.

There are a number of other ways you can set yourself up for success, including building up an emergency savings buffer, following uncompromising WorkSafe practices to reduce the risk of injury, keeping excellent, detail-orientated records, and obtaining quality legal advice.

Can sole traders claim WorkCover?

Since workers’ compensation is designed to protect employees who are injured or become unwell because of their work, it doesn’t apply to sole traders—because you’re not considered an employee, you are the business. But that doesn’t mean you’re left without options. There are other ways for sole traders to safeguard themselves, including insurance that can help cover loss of income if you’re unable to work due to a job-related injury or illness.

Can a sole trader get sued?

Like anyone, a sole trader can be sued. Even though you’re running your own business, it doesn’t mean you’re immune from legal issues. If something goes wrong—like a customer isn’t happy with your work or there’s an accident—you could find yourself facing a lawsuit. This is why it’s super important to have the right protections in place, so you’re covered if the unexpected happens.

Is a sole trader fully liable?

As a sole trader, you’re fully liable for your business. There is no legal separation between you and your business, and you’re personally responsible for any debts, losses, or legal issues that come up. It’s a big responsibility, but knowing this can help you take the right steps to protect yourself and your hard work.

Do I need public liability insurance if I’m a sole trader?

There are no states in Australia where it is compulsory to take out public liability insurance as a sole trader, but it is highly recommended. Public liability insurance protects you if someone gets injured or their property is damaged because of your business activities. And depending on your industry, clients may even ask for it before working with you, so it can help you win more work.

Not having public liability insurance is allowed, and it’s perfectly fine—as long as nothing ever goes wrong.

What does public liability cover for sole traders?

Public liability insurance for sole traders covers you if your business causes injury to someone else or damages their property. For example, if a client trips over your equipment or if you accidentally damage a customer’s property while working on their site, this insurance helps cover the costs of medical bills, repairs, or legal fees. It’s all about protecting your business and your wallet from unexpected accidents that could otherwise get really costly.

Do sole traders need WorkCover in QLD?

Only if you hire employees. If you’re a one-person operation, then you are not required to get, nor are you covered by WorkCover. This is because a sole trader is considered a business, not an employee. The lack of WorkCover is why it’s so important to obtain quality public liability insurance with income protection. This will cover you if something goes wrong—protecting the business you’ve built, and giving you breathing room to get back on your feet.