Asked for a workers compensation certificate as a sole trader
In short
- State schemes generally cover workers, not the person who owns the business.
- A sole trader with nobody working for them usually cannot buy a policy, so cannot produce a certificate of currency for one.
- The checklist is asking a question that does not apply, and saying so plainly is usually the fastest resolution.
A procurement checklist arrives listing public liability, professional indemnity and workers compensation, each to be evidenced by a certificate of currency. The recipient is a sole trader with no employees, and spends a day trying to buy something the scheme will not sell them.
This is one of the most common dead ends in Australian small business insurance, and it comes from a template rather than from the law.
Why the certificate usually cannot exist
Workers compensation schemes are built around the employment relationship. They cover workers, and a person who is not a worker of anyone generally cannot be covered by one. Several schemes say so directly.
That means a sole trader with no employees usually has no policy to hold and no certificate to produce. It is not an oversight in their setup; it is the structure of the scheme.
The scheme pages on this site record how each state and territory treats this, because the detail differs and so do the exemptions.
- [Statutory schemes by state](/schemes)
- [Workers compensation insurance](/insurance/workers-compensation)
What the checklist is usually trying to establish
Behind the request is a reasonable concern: if somebody is hurt doing this work, is there a scheme standing behind it, and is the principal exposed. That concern is answerable even when the certificate is not.
Replying with the facts — sole trader, no workers, no policy available under the scheme, here is what is held instead — resolves most of these. Requesters generally accept it once they understand the question does not apply, and many templates have simply never been reviewed.
What sits in the gap
The gap the scheme leaves is real. A sole trader who is injured has no scheme benefit and no income, and that is the exposure personal accident and sickness cover is written for.
It is a different product with a different structure: a defined weekly benefit for a defined period, rather than the open-ended statutory entitlements a worker receives. Whether it suits a particular person is a question for someone licensed to advise.
- [Personal accident and sickness insurance](/insurance/personal-accident)
The trap on the other side of it
Sole traders who take on their first helper — a casual hand, a family member, an apprentice — can cross into the scheme without noticing, because the trigger is employing somebody the scheme defines as a worker.
Engaging subcontractors raises the same question from a different direction, since every scheme has provisions capable of deeming a contractor to be a worker of the business engaging them. Holding an ABN does not settle it.
Questions
- Can I buy workers compensation to cover myself as a sole trader?
- Generally not, because schemes cover workers rather than the proprietor. The scheme pages here record how each state treats it. Personal accident and sickness cover is the class written for the resulting gap.
- What do I send when the form insists on a certificate?
- A plain explanation that you are a sole trader with no workers, that the scheme does not issue a policy in those circumstances, and copies of the cover you do hold. Most requesters accept that once the position is explained.
- My subcontractor has an ABN. Does that keep me out of the scheme?
- Not by itself. Every scheme has provisions that can deem a contractor to be a worker of the business engaging them, and an ABN does not decide the question. The scheme page for your state records how that state defines a worker.
Sources
- Moneysmart (ASIC) — General guidance on business insurance from the regulator’s consumer site.