Top 5 Mistakes to Avoid When Comparing Builders Insurance Quotes

Discover common pitfalls tradies and builders make when searching for insurance—and how to choose the right policy for your business. 

When it comes to protecting your building or construction business, insurance isn’t the place to cut corners. Yet, many tradies and builders rush through the quoting process, only to discover too late that they’ve missed something important. 

Choosing the wrong insurance—or overlooking key details—can leave you exposed to financial loss, legal issues, or rejected claims. 

To help you avoid those costly mistakes, here are the top 5 mistakes to avoid when comparing builders insurance quotes, and how to make sure you get the right coverage the first time. 

❌ 1. Focusing Only on Price 

We get it—when you’re running a tight budget, it’s tempting to just grab the cheapest quote. But price doesn’t always reflect value. A cheaper premium might also mean: 

• Lower cover limits 
• Higher excess (out-of-pocket cost when you make a claim) 
• Important exclusions (like no theft or storm damage cover) 
• Poor claims service or slow payout times 

✅ What to do instead: 

Compare what’s actually included in each policy. Look at the coverage types, the limits, and the insurer’s reputation. Think long-term: paying a little more now can save you a lot later if something goes wrong on site. 

❌ 2. Not Understanding What the Policy Covers 

Insurance jargon can be confusing, but not reading the fine print can lead to nasty surprises. Some tradies assume they’re covered for certain events, only to find out later that their policy excludes them. 

Common exclusions or limitations include: 

• Subcontractors not being covered under your liability insurance 
• Tools left in unlocked vehicles not being insured 
• Project delays or business interruptions not being covered 
• Damage from defective workmanship being excluded 

✅ What to do instead: 

Ask questions. If you’re not sure what’s covered, speak to a broker or read the Product Disclosure Statement (PDS). Make sure the policy matches your real-world risks. 

❌ 3. Underinsuring Your Business 

To save on premiums, some builders choose cover amounts that don’t reflect the true value of their work, tools, or liabilities. This might reduce your monthly cost—but it can backfire badly if you need to make a claim. 

Imagine having $20,000 worth of tools but only insuring them for $10,000. In the event of theft or fire, you’re only going to get back half—leaving you out of pocket and potentially unable to continue working. 

✅ What to do instead: 

Be honest and realistic when valuing your tools, project costs, and potential liabilities. Underinsurance is one of the main reasons claims get reduced or denied. 

❌ 4. Ignoring State-Specific Requirements 

In Australia, some types of builders insurance—like Builders Warranty Insurance—are required by law depending on the state and the value of the work. These rules vary, and failing to comply can lead to serious penalties or loss of license. 

For example: 

• In NSW, builders warranty insurance is mandatory for residential jobs over $20,000 
• In VIC, it’s required for domestic building over $16,000 
• In QLD, it’s managed through the QBCC and compulsory for most residential work 

✅ What to do instead: 

Check the requirements for your state and type of work. If you’re unsure, talk to a broker who understands the construction industry, like Sirius Insurance—they’ll make sure you’re ticking all the right boxes. 

❌ 5. Not Using a Specialist Broker 

Buying insurance online might seem quicker, but general insurers often don’t understand the specific risks builders face—especially if you use subcontractors, operate on different sites, or carry expensive tools. 

Specialist brokers, on the other hand: 

• Know the construction industry inside out 
• Can compare multiple insurers and tailor a policy to your needs 
• Help you avoid hidden exclusions 
• Assist you during the claims process 
• Often save you money by negotiating better deals 

✅ What to do instead: 

Work with a broker who focuses on construction insurance. Not only will they save you time, they’ll also help protect your business properly—so you can focus on getting the job done. 

🔧 Avoiding These Mistakes = Peace of Mind 

Getting the right builders insurance isn’t just about staying compliant—it’s about protecting your livelihood, reputation, and financial future. By avoiding these five common mistakes, you’ll be in a better position to choose a policy that actually works for your business. 

📞 Need Help Getting It Right? 

Don’t go it alone. 
Contact Sirius Insurance—your trusted insurance broker who specialises in builders insurance.

We’ll help you: 

• Compare quotes from top insurers 
• Understand exactly what’s covered 
• Avoid underinsurance and hidden exclusions 
• Get the best possible value for your premium 

👉 Get in touch with Sirius Insurance today and protect your business with confidence.