When you’re aself-employedsole trader,it’s up to you to ensure yoursmall businesssucceeds. Whether you’re atradesman, financial advisor, freelance creative or in another role entirely,business insurancecan help protectyoufrom financial ruin.
Whichbusiness insurancepolicies should a sole trader consider?
Business insurancecan cover the cost of a range of unfortunate events which could otherwise cause severe financial stress, from accidents and injuries to theft and legal action. Sometimes, some of these coversmay even be mandatory underAustralianor state law.
There is no specific insurance cover for sole traders in Australia. There are, however, many differenttypes ofinsurancecoversforbusiness owners, which you may have the option of bundling together. Below are some common business insurance covers that you may consider as a sole trader.
Public Liability insurance
Public Liability insurancecan come in handy whether you’re out and about or grinding away on your own in a workshop or office.Public Liability insurancehelps protect your business if a customer, supplier or member of the publicbrings a claim for personal injuryor property damage caused by your negligent business activities. It isn’t justretailersorrestaurantsthat could benefit fromPublic Liability insurance.Tradies, dog walkers, personal trainers and many othersole tradersmay benefit from having this cover.*
Professional Indemnity
If you’re asole traderproviding advice and services to clients (such as an accountant or consultant), you may wish to consider aProfessional Indemnity insurancecover.
Professional Indemnity insurance is designed for businesses that offer specialist services or giveprofessional advice. It is designed to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional serviceor advice.Professional indemnity insurancealso helps out withlegal costsassociated with responding to or managing claims covered by the policy.*
Business Interruptioninsurance
Business Interruptioninsurance provides cover for the loss of income and increased costs of operating your business caused by a specified insured event. For example, if an insured event (e.g. fire) causes your business to stop or shut down temporarily, Business Interruption insurance may help you pay the bills (like employee wages) as well as covering the cost of moving to new premises.
Thisinsurance optionis worth considering if yourbusiness needsa regular income to survive. As with anytype of insurance coverage, it’s vital to check thepolicy wordingin the Product Disclosure Statement (PDS) so you know what events you’ll be covered for.
Protection for your business assets
There are also a number ofbusiness insurancepackage policies* designed to cover your physical assets and these can often includepublic liability cover. A few examples include:
- Building. If you own the building from which your business operates, building insurance can provide cover for loss anddamageto your premises caused by defined events listed in the policy, like fires, floods, storms and accidental damage. You may need to purchase additional cover to include damage to windows and glass surfaces in the building.
- Contents.This policy covers your business’ contents or stock if they’re damaged by fire, storms, malicious damage or another defined event listed in your policy.
- Theft and vandalism. This covers your business for the cost of replacing stolen goods and any damage caused to your business premises by burglary, attempted burglary and vandalism.
- Portable equipment insurance(also known as general property insurance). This policy covers you for loss and damage to portable business equipment associated with your business, like tools and stock items.
- Machinery breakdown insurance. It covers the cost of repair or replacement for nominated machines used by your business, such as refrigerators and air conditioners.
Discover more about business insurance
What else can be covered by business insurance? Check out our list of different types of business insurance to find out more.
Working from home? Learn more about business insurance for home-based businesses.
Looking for information about your industry? Our handy list of industry guides may be useful.
Frequently asked questions
Business insurance tips for sole traders from our expert, Adrian Taylor:
- Be open and honest with your insurer at the time of your insurance application. Don’t try and ‘hide’ any previous claims, turnover or staff numbers, for example. In the event of a claim, you do not want any nasty surprises based on incorrect information previously given.
- Don’t think of business insurance as ‘set and forget’/ As your business grows and changes, so too will your business insurance needs. Compare your options often.
- Be sure to understand what you are covered for. It’s important to read the PDS or talk to the insurer if in doubt.
- Wild weather can often force businesses to shut down sometimes for a lengthy period of time. Please review your insurance to safeguard against floods, cyclones, storms and bushfires.
- Different insurers will rate the risk of various industries differently. One insurer may rate your industry lower than others meaning you may likely see a lower premium. Business owners and sole traders should use Compare the Market to compare a range of policies from different insurers.
Compare your options in minutes
If you’re asole traderwho needs insurance, we can help you save time finding cover. You can get a quote from a range ofbusiness insuranceprovidersin minutes using ourfree comparison service.
Need help or want more information? You can also call our friendly experts for assistance.
* This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
