New Insurance Code Step Highlights Cover Gaps for Tradies

The proposed code was submitted on 22 October 2026 after consultation with consumer groups, regulators, government and insurers. If approved by ASIC, it is expected to become contractually enforceable for relevant policies after a transition period. That means selected obligations could become part of the insurance contract, giving customers clearer avenues to raise issues through complaints, AFCA processes, independent code oversight or, in some circumstances, the courts.

The practical point for trade businesses is that the code does not operate as a universal rulebook for every policy. The proposed wording covers retail insurance and certain wholesale insurance products used by small businesses. For example, it includes general property cover, described in the code as including portable business property such as tools of trade or business equipment away from the business premises. It also includes business interruption and some heavier commercial motor cover within the wholesale definition.

However, several policies that many trade businesses commonly consider are specifically excluded from the wholesale definition. These include contractors all risks, legal liability including public liability and products liability, professional indemnity, industrial special risks and some other specialist covers. Separate exclusions also apply to workers compensation, CTP, marine insurance, life insurance, health insurance and domestic builders insurance.

That distinction matters because a tradie may deal with very different policy types across the same business. A tools theft claim, a ute claim, a liability allegation, a contract works issue and a workers compensation matter may each sit under different legal and industry frameworks. The proposed code may improve expectations around matters such as claims communication, complaints handling, vulnerability support, hardship processes and expert reports, but only where the relevant policy and insurer fall within its coverage.

For small trade businesses, the lesson is not to assume that a stronger industry code automatically changes every insurance relationship. At renewal or when reviewing cover, it is sensible to check which policies are code-covered, what claims standards apply, and how complaints would be handled if a dispute arose. This is especially relevant where a business relies on several policies at once, such as tools and equipment, commercial vehicle, contract works and liability cover.

ASIC approval is still the next major step, so the final timing and implementation details remain important. Until then, tradies should treat the proposal as a sign of changing expectations in the insurance sector rather than an immediate change to every policy term.