PUBLIC LIABILITY INSURANCE FOR SOLE TRADER: Business Insurance to Consider, Cost & All You Need to Know  

public liability insurance for sole trader
Image credit: BBblog

As a sole trader, your work may have a direct and unintended impact on a member of the public or a client. To protect your business from claims of harm or damage caused by your work, you may need public liability insurance as a sole trader. Whether you operate from home, in an office, or in a public location, you could be held liable if an accident occurs as a result of your employment. If you’re an electrician and someone trips over your toolbox or a consultant and a client’s laptop is damaged during a meeting in your home office, it’s your responsibility to fix it.

Why do you need sole trader public liability insurance?

Running a business on your own is no easy task. Aside from all the hard work, you’ll also have to deal with keeping meticulous financial records, ordering supplies, and all the other paperwork that comes with being a sole trader. You don’t want to add the stress of an accident to the mix. If a client or member of the public believes they have been physically wounded or have lost money as a result of your work, they may seek compensation, and you may be required to pay a large sum. And as a sole proprietor, you are alone responsible for paying the bill.

Which business public liabilty insurance policies should a sole trader consider?

From accidents and injuries to theft and legal action, business insurance may help cover the costs of a variety of unfortunate events that could otherwise put your business under a lot of financial strain. These products may be regulated by Australian or state legislation in some cases.

In Australia, there is no specific insurance coverage for sole traders. There are, however, a variety of insurance products available for business owners, which you may be able to bundle together. As a sole trader, you may want to look into any of the following common business insurance products.

#1. Public liability insurance

Whether you’re out and about or working alone in a factory or office, public liability insurance can come in handy. If a client, supplier, or member of the public files a claim for bodily injury or property damage caused by your business activities, public liability insurance can help protect your company. More so, retailers and restaurants aren’t the only ones that could benefit from public liability insurance. In addition, this insurance may be beneficial to traders, dog walkers, personal trainers, and a variety of other sole traders.

#2. Professional indemnity

A professional indemnity insurance policy may be appropriate for a sole trader providing advice and services to clients (such as an accountant or consultant).

Expert indemnity insurance is for companies that provide specialised services or professional advice. When you give a professional service or advice, it protects against claims against you for losses caused by actual or claimed negligent acts or omissions. Legal costs involved with responding to or managing claims covered by the policy are also covered by professional indemnity insurance.

#3. Business interruption insurance

Business interruption insurance is a type of insurance coverage that can help you pay the costs of a disruption in your business operations. If your firm is temporarily halted or shut down due to an insured occurrence (such as a fire), business interruption insurance can help you pay your bills (such as employee wages) as well as cover the cost of shifting to new premises.

If your company relies on a steady stream of revenue to stay afloat, this insurance option is worth investigating. It’s critical to read the policy wording in the Product Disclosure Statement (PDS) for any sort of insurance coverage so you know what occurrences are covered.

#4. Business car insurance

While you must have vehicle insurance to drive in the UK, if your job requires you to do more than just commute to and from work, you will need to get a specialist business car insurance policy.

A builder driving to various sites, a salesperson going from client to client, or even a worker running errands during the day are all examples of this.

Of course, certain vocations require you to operate a vehicle on a regular basis, such as driving a van or a taxi. These would necessitate separate commercial auto insurance plans.

#5. Self-employed courier insurance

There are two types of insurance to consider as a self-employed courier transporting food or commodities for a living.

The first is specialist car courier insurance, which will protect you in the event of an accident while driving. This could be courier van insurance, courier car insurance, or delivery rider insurance for mopeds, scooters, and motorbikes, depending on what you use to make deliveries.

The second is insurance for items in transit. If the products you’re delivering are lost, stolen, or destroyed, this will cover the expense of replacing them.

#6. Tool insurance

Carpenters, builders, and plumbers are just a few of the occupations that rely heavily on tools.

Tool insurance, on the other hand, doesn’t just cover the loss, theft, or damage of ‘conventional’ tools like wrenches, saws, and screwdrivers. It also covers modern technology like cell phones and laptop computers.

So, if your job necessitates the use of a tool that you simply cannot do without, you should consider purchasing tool insurance.

#7. Personal accident insurance

Clients and members of the public aren’t the only ones who can get hurt while you’re at work.

Personal accident insurance, which is separate from life insurance and private healthcare insurance, can help if you are unable to work.

Protection for your business assets

There are also a number of business insurance package policies to cover your physical assets, and these can often include public liability coverage. A few examples include:

#1. Building

If you own the building where your business is located, you may be covered for loss and damage to your property due to incidents included in the policy, such as fires, floods, storms, and unintentional damage. You may need to obtain additional coverage to cover damage to the building’s windows and glass surfaces.

#2. Contents

If your business’s contents or stock are damaged by fire, storms, malicious damage, or any defined event listed in your insurance, this coverage will cover them.

#3. Theft and vandalism

This covers the cost of replacing stolen items as well as any damage caused by burglary, attempted burglary, or vandalism to your business.

#4. Portable equipment insurance

(This is also referred to as general property insurance.) This policy protects you against the loss or damage of portable business equipment, such as tools and inventory.

#5. Machinery breakdown insurance

It covers the expense of repairing or replacing machines that your company uses, such as refrigerators and air conditioners.

Public Liability Insurance For Sole Trader Cost

One of the most significant types of insurance for tradespeople is public liability, which provides a high level of financial protection against a variety of accidents that might occur on the job site.

However, how much will your public liability insurance for sole traders cost? We’ll look at how liability premiums are calculated and why you pay the amount you do in this tutorial.

Factors Affecting the Public Liability Insurance for Sole Trader Cost

The cost of tradesman public liability insurance is processed by a number of criteria, including the nature and size of your business. As well as the amount of coverage you require.

The cost of your coverage, as with most types of insurance, will ultimately be on the level of risk that the insurance company believes you may pose.

#1. Business Type

The type of trade firm you run will have a significant impact on your public liability insurance costs. Also, trades with a lesser risk are subject to lower premiums. Carpenters working on home and light commercial projects are in this category.

Based on the potential hazards, other trades can command substantially greater costs. Boilermakers and scaffolders are two of the more expensive trades.

Premiums for some trades may rise as a result of recent claims incidents. Plumbers, for example, are seeing substantial cost increases across the board as a result of a surge in water damage claims.

For each trade, each insurer has a different pricing structure. One insurer, for example, may be the lowest for electricians but the most expensive for carpenters.

#2. Business Size

The cost of public liability insurance for a tradesman is heavily by the size of your firm.

Some insurers determine the size of a company based on its turnover, while others use a combination of the two.

Due to the possibility of risk with a larger firm, the cost of public liability insurance is by the size of the business. A higher turnover rate or a larger workforce will almost always result in a higher insurance premium.

#3. Part-Time Business

Some clients assume that if they run their business part-time, they should pay a lower fee.

This isn’t always the case, and it’s owing to a concept known as minimum premium.’

If an insurer bases its price on the number of employees, and your company just has one. The insurance cost is already at the minimum premium.’

Whether you work full-time or part-time in your firm, the insurer will simply rate your insurance at a minimal cost for one employee.

Insurers who determine insurance rates based on revenue are in a similar predicament.

At roughly $100k in annual revenue, the minimum premium will usually kick in. So, whether your income is $100k or $50k, you’ve already paid the minimum premium, and the price won’t go down.

#4. Business Location

Your business’s location will have an impact on your public liability costs in a variety of ways. Therefore, your state will have an impact on stamp duty, your geographic location will have an impact on risk, and the types of sites you work on will have an impact on risk as well.

#5. State – Stamp Duty

The amount of stamp duty charged on insurance premiums varies by state in Australia. Depending on whatever state you live in, this will have a varying impact on your public liability costs.

If your annual turnover in NSW is less than $2 million, you might save even more money on stamp duty. In this event, the cost of public liability and some other types of business insurance will be $0.

#6. Geographical Location

Some insurance providers offer different prices depending on the area where you work. This is similar to how car insurance and home insurance are priced differently based on where you reside.

You will pay less if you reside in an area with a good claims history, and more if you live in an area with a poor claims history. For the insurers who do alter their prices on this basis.

#7. Specific Worksites

Tradesmen who work on sites are typically from most public liability policies. Airports, railway stations, power plants, mines, and marine ports are examples of common places that are excluded.

Working on these sites does not always imply that you will be unable to obtain insurance. It simply means you’ll have to go via a speciality insurance firm. Which will charge you more than a traditional insurance company.

How much does insurance cost for sole traders?

Because the overall cost is depending on how many various forms of insurance you desire. It’s difficult to tell how much you’ll wind up spending on insurance. In our experience. Sole traders can typically pay $50 to $100 per month on public liability insurance to meet the bare minimum requirements. Freelancers should expect to pay roughly $500 per year in premiums to insure around $12,000 in equipment.

It’s crucial to know that you can deduct your insurance premiums from your taxes. This means that anything you pay in insurance premiums over the course of the year can help you save money on taxes.

How to find the right insurance for you

Hopefully, our examination of the various types of insurance has assisted you in determining what types of freelancer insurance you require for your company. Which brings us to the next important question: how can you choose the best insurance company for you?

As previously stated, seeking the opinion of someone who is familiar with lone trader insurance is always a good idea. This might be a business advisor (a list of economic possibilities can be here), or you could contact the Australian government’s Business department.

If you want to do your own research, one of the many insurance comparison websites is available. Such as Finder, iSelect, or Choosi, is your best chance. You’ll get a number of quotations from different insurers after filling out some basic information about your business. Then it’s a simple question of comparing prices and coverage to locate the best deal.


What sort of insurance does a sole trader need?

As a sole trader, you can’t cover yourself as an ’employee’ with workers’ compensation insurance. So you’ll need to consider your own personal death, illness, and disability insurance. You can cover yourself for accident and sickness insurance through a private insurer.

Do I need public liability?

Do I need public liability insurance? You’re not legally required to have public liability insurance, but if you’re a business owner the chances are you’ll need it. Public liability insurance covers your costs if someone else sues your business – and without cover, unexpected legal costs could bankrupt your business.

Is public liability insurance included in home insurance?

Public liability insurance covers you when you are being held responsible to a person or property, as the owner or occupier of your home. For example, our buildings insurance covers you as the owner of the home for claims such as a tile falling off of your roof and injuring a visitor.

" } } , { "@type": "Question", "name": "Is public liability insurance included in home insurance?", "acceptedAnswer": { "@type": "Answer", "text": "

Public liability insurance covers you when you are being held responsible to a person or property, as the owner or occupier of your home. For example, our buildings insurance covers you as the owner of the home for claims such as a tile falling off of your roof and injuring a visitor.

" } } ] }
  1. Sole Trader Advantages and Disadvantages
  2. COURIER INSURANCE: Definition, Cost, Cover & All You Need to Know
  3. How to Become a Car Trader: Detailed Guide
Leave a Reply

Your email address will not be published. Required fields are marked *