Insurance For Sole Traders

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Many people enjoy the simple structure of being a sole trader, but it does mean that you have more than most to lose if things go pear shaped in your business.

Unlike a Pty Ltd company, you and your business are a single legal entity, which means if things go wrong in your business it can easily affect your personal finances.

This is why insurance is arguably more important for a sole trader that it is for any other business type.

Public Liability for a Sole Trader

If your business has even the slightest risk exposure to causing property damage or personal injury to another person, public liability insurance should be considered an absolute must.

When you cause damage or injury as a result of your business activities you are liable for all costs that the person suffers as a result.

In a minor event this could simply involve a few hundred dollars to replace or repair their damaged property, but if an incident results in major injury or even death, the figures can potentially climb into the millions.

As a sole trader you and your business are jointly liable for these costs, and if you cannot settle the claim using your own money you will most likely be forced into personal bankruptcy.

As scary as that sounds, you can easily avoid this situation by having adequate public liability insurance in place for your business.

With the right cover in place, a claim relating to property damage or personal injury caused by your business will be covered by your insurance rather than impacting on your own financial situation.

Obtaining Cover

Despite the high level of cover which the insurance provides, taking out public liability is actually very straightforward for most sole trader businesses.

Your insurance broker will ask you a number of questions about your business, and in most cases they will be able to provide quotes and cover within a very short time-frame.

You can also obtain cover directly from a number of insurance companies via their websites and call centers, but when it comes to business insurance we strongly recommend using a licensed broker or adviser.

Insurance Costs

The cost of public liability cover for a sole trader will depend heavily on the type of work they undertake and the size of their business in terms of annual revenue.

As an example, the public liability cost for a sole trader carpenter working on residential projects only can be from as low as $450 per year.

If you undertake more complex or higher risk business activities, or if you work in locations which are considered to be hazardous, the cost of your insurance can rise considerably.

The best option for finding out the cost of your insurance is to request a quote from a qualified broker. Through our website you can do just this by clicking on our online quote button.

Other Types of Insurance

Although our website specialises in public liability insurance, there are other forms of cover which sole traders should consider.

One of the most important is income protection. As sole traders do not have access to sick leave or workers compensation, an income protection policy is one of the few ways of avoiding financial hardship whilst being unable to work.

You can find more information on income protection insurance by following this link to our dedicated page.

For more information on insurance for sole traders you should speak with your insurance broker or financial adviser.

Frequently Asked Questions

In some respects public liability insurance is very straightforward, but once you scratch the surface it can actually be a very complex area with many potential complications.

As part of our quest to make this important form of insurance easier for Australian small business owners and operators to understand we are in the process of putting together a list of the most commonly asked questions.

Please keep in mind that this FAQ contains very generalised answers and should in no way be seen or used as a substitute for proper advice from a qualified insurance broker or adviser.

If you would like to add a question to the list please contact us.

1. What does public liability cover?
2. How much does public liability cost?
3. Does it cover my staff and employees?
4. Does it cover my subcontractors?
5. Which companies issue public liability?
6. How does this website work?
7. Where is the website based?
8. How can I get a quote?
9. Can I pay my premiums monthly?
10. Do you provide insurance for tradesmen?
11. How much public liability do I need?
12. Does public liability cover defective work?
13. Are my professional services covered by public liability?
14. Are these differences in cover between policies?
15. What is an endorsement?
16. What is broadform liability insurance?
1. What does public liability cover?

Public liability insurance covers a range of risks, with the major ones being property damage and personal injuries caused to other people as a result of your business activities.

You can read more by visiting our ‘what is public liability insurance‘ page.

2. How much does public liability cost?

The cost of public liability can vary greatly from as little as $300 a year through to many thousands per year. The cost will depend heavily on the type and size of business that you run.

You can find out more by reading our public liability insurance cost page.

3. Does it cover my staff and employees?

A public liability policy will cover property damage and personal injury caused by your own staff and employees, but it will not cover property damage or personal injury that they suffer.

Personal injury to your staff can be covered by worker’s compensation and income protection insurance.

4. Does it cover my subcontractors?

Your public liability insurance will not cover your subcontractors in most cases. This includes damage caused by them as well as suffered by them.

There are some policies which may provide some cover, but these will generally be a far more expensive form of insurance. Subcontractors should have their own public liability and income protection in most cases.

5. Which companies issue public liability?

There are many insurance companies in Australia which offer public liability cover. These include the mainstream insurers like AAMI and NRMA, along with more specialist insurance providers.

The insurance brokers and advisers that we deal with will generally have access to a wide range of public liability insurance companies.

6. How does this website work?

The owners and operators of the publicliabilityinsurance.com.au website are not insurance brokers or advisers. We do not provide any quotes or advice ourselves, and instead we have a network of professionals that we refer people to when a quote is requested.

You can read more about how our website works by referring to our terms of use.

7. Where is the website based?

We are based in Brisbane, however we are able to assist business owners all over Australia. Our network of brokers and adviser are also based here in Brisbane as well as throughout the country.

8. How can I get a quote?

Getting a quote on your insurance is easy thanks to our online forms. In order to obtain a quote you simply have to provide your relevant business details and one of our network of brokers will prepare your quotes.

To obtain a quotation please complete our online quote request.

9. Can I pay my premiums monthly?

Public liability insurance can be paid monthly, however it is up to the individual broker or adviser to offer this service. Monthly premiums are generally arranged by an independent funding company rather than directly through the insurer.

In most cases it will be more expensive to pay your insurance monthly, but you can check this with your insurance broker or adviser when requesting quotes.

10. Do you provide insurance for tradesmen?

Our network on insurance brokers and advisers includes a number of experts on insurance for tradesmen. Tradesmen are actually one of our biggest client segments when it comes to public liability.

For more information please visit our dedicated tradesman public liability insurance section.

11. How much public liability do I need?

The amount of public liability insurance required will differ for each business, but in most cases the minimum is $5,000,000

If you require the cover as part of a specific contract you have entered into, generally the contract will stipulate the minimum amount of cover required.

Please visit our guide titled ‘how much is enough’ for more information.

12. Does public liability cover defective work?

Public liability insurance does cover defective or faulty work, however only certain costs are covered.

Property damage and personal injury suffered as a consequence on the defective work will be covered, however the costs of rectifying the defective work will not be covered.

For more information please visit our guide on defective work coverage.

13. Are my professional services covered by public liability?

A public liability policy is not designed cover losses relating to or as a result of the professional services or expert advice that you provide to clients.

You can still insure yourself against this risk however, through a separate form of cover known as professional indemnity insurance.

Click here for a more detailed answer to this question.

14. Are these differences in cover between policies?

Broadly speaking there is no difference in the basic cover offered by different public liability insurance policies.

All policies cover the costs involved in a claim against you for property damage or personal injury to another person that you are found to be liable for.

Where the policies can differ is in the exclusions and endorsements. The differences here can be huge depending on the type of business you run.

Click here for a more comprehensive answer to this question.

15. What is an endorsement?

An endorsement is a documented attachment to an insurance policy which can effectively change the standard wording of the policy.

They are generally used to either add or remove cover for a certain event or activity, and are often triggered by specific occupations or business types.

Endorsements can have a major impact in the event of a claim, so it’s important to check the endorsements before choosing a public liability policy.

Click here for a more comprehensive answer to this question.

16. What is broadform liability insurance?

Broadform liability simply refers to a business insurance policy which covers both public liability and product liability.

Most public liability policies will also cover product liability, essentially making the policy broadform, but this is not always the case.

By checking your policy documentation or asking your broker you will be able to see if your insurance is broadform or not.

Click here for a more comprehensive answer to this question.

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