If your body is your business: the cover questions tradies keep running into

Call him Deano. He’s a composite, not a client, but every adviser in the country has met a dozen of him. Sparkie, mid-thirties, sole trader, booked out for months, ute half paid off, a partner and a kid at home. Deano’s business plan has one line in it: Deano turns up. Which works brilliantly until the day a shoulder, a knee or a ladder has other ideas.

An office worker never quite feels this in their bones: when your body is the business, illness and injury are revenue events, not HR events. And the standard employee safety nets, sick leave, an employer, a desk job to be shuffled into, mostly don’t exist. For tradies, that makes the income protection conversation the main event. Questions worth checking, not advice for any real Deano, follow.

Why is the waiting period the whole ballgame here?

An employee who does their sick-leave maths gets to count weeks of paid leave before their savings take a hit. Deano’s version of that maths is shorter: leave balance, zero. Every week of an income protection waiting period, the stretch before benefit payments start accruing, comes straight out of savings, or straight onto the credit card.

Waiting periods commonly run from 14 days up to two years, and shorter waits generally cost more. For someone with no employer buffer, the honest questions are:

1. How many weeks could the household genuinely run on savings alone? Real spending, not optimistic spending, and remembering the business’s fixed costs may keep ticking too.
2. Does the waiting period on any cover I hold match that number? Especially default cover in super, which was never set with a sole trader’s zero-leave reality in mind.
3. What’s the benefit period on the other end? Benefit periods commonly run two years, five years, or to a set age, and a short one paired with a long wait means cover that starts late and stops early.

Source: ASIC MoneySmart, income protection insurance.

What counts as “income” when you’re self-employed?

Second trap, and it’s a paperwork one. Income protection generally replaces a portion of earnings, and for a sole trader, proving earnings means financials: tax returns, BAS, books that reflect reality. The questions worth checking are whether your declared income actually reflects what the household lives on, and whether your bookkeeping could demonstrate it at claim time. A policy sized against income the paperwork can’t support is a policy with a built-in argument.

There’s also the structure question. How your cover treats business expenses, fluctuating income and time between jobs varies with the policy, which is exactly the fine print worth reading before it matters rather than after.

What about the injury that ends the trade, not just the year?

Here’s where the second cover enters. Some injuries don’t just cost a season; they close the door on the tools permanently while leaving plenty of other work possible. That’s precisely the gap where TPD definitions earn their keep. An own-occupation definition asks whether you can ever return to your trade. An any-occupation definition, the kind super TPD typically uses, asks whether you could do any job suited to your education, training and experience.

For a tradie, that difference is not academic. A shoulder that ends a roofing career may not stop a person doing site supervision or sales. Under one definition that situation may meet the test; under the other it may not. Knowing which definition sits in your policy, before you need it, is a ten-minute job with career-sized consequences.

The catch nobody tells sole traders

The part that surprises people: the default insurance system was built around employees, and sole traders fall through its assumptions. Default super cover arrives via employer contributions, so patchy contribution years can mean patchy cover, and an account that goes quiet can have its insurance switched off entirely. Waiting periods get defaulted to lengths that assume sick leave exists. And nobody sends a sole trader an annual reminder, because there’s no HR department to do it. The system was simply never designed with tradies in the room, which means the checking falls to you.

Worth saying too: none of this is a reason for gloom. It’s one afternoon of checking, and most of the answers live in a super statement and a policy schedule.

Where to from here

If you’re carrying a business on your body, the twenty-minute version is: find every policy and super account, note the waiting period, benefit period and TPD definition on each, and be honest about your savings runway. If you’d rather walk through it with someone who reads these documents daily, book a no-obligation chat with Justin. If your setup already fits, he’ll say so and you’re back on the tools.

Related reading

• Waiting periods explained
• Own occupation vs any occupation TPD
• Reviewing your existing cover

General advice only. It does not take into account your objectives, financial situation, or needs. Consider whether it is appropriate for you and read the relevant Product Disclosure Statement (PDS) before deciding. Whether a benefit is payable depends on the specific policy terms.