When you’re a self-employed sole trader, it’s up to you to ensure your small business succeeds. Whether you’re a tradesman, financial advisor, freelance creative or in another role entirely, business insurance can help protect you from financial ruin.
Business insurance can 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, these products may even be mandatory under Australian or state law.
There is no specific insurance policy for sole traders in Australia. There are, however, many different types of insurance policies for business owners, which you may have the option of bundling together. Below are some common business insurance policies that you may consider as a sole trader.
Public liability insurance can come in handy whether you’re out and about or grinding away on your own in a workshop or office. Public liability insurance helps protect your business if a customer, supplier or member of the public brings a claim for personal injury or property damage caused by your business activities. It isn’t just retailers or restaurants that could benefit from public liability insurance. Tradies, dog walkers, personal trainers and many other sole traders may benefit from having this cover.
If you’re a sole trader providing advice and services to clients (such as an accountant or consultant), you may wish to consider a professional indemnity insurance policy.
Professional indemnity insurance is designed for businesses that offer specialist services or give professional advice. It covers claims against you for losses caused by actual or alleged negligent acts or omissions when you have provided a professional service or advice. Professional indemnity insurance also helps out with legal costs associated with responding to or managing claims covered by the policy.
Business interruption insurance is a type of insurance cover that can help smooth over your business’ expenses following an incident that disrupts your operation. 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.
This insurance option is worth considering if your business needs a regular income to survive. As with any type of insurance coverage, it’s vital to check the policy wording in the Product Disclosure Statement (PDS) so you know what events you’ll be covered for.
There are also a number of business insurance package policies* designed to cover your physical assets and these can often include public liability cover. A few examples include:
What else can be covered by business insurance? Check out our list of different types of business insurance to find out more.
Work 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.
The level of cover you need as a self-employed sole trader will depend on a number of factors, such as:
To get an idea of what your premiums could cost, you can complete a quote for business insurance with us. It only takes a few minutes and you’ll see the kind of value such a policy could provide. It also doesn’t cost you a cent to compare.
Cyber liability insurance is handy if you collect and store client information on a digital system, such as customer emails for digital marketing or personal customer details such as names and addresses. Cyber liability insurance helps financially protect you from claims and supports your profitability in the event of a cyber breach or attack.
If you have employees working for you, you’ll need to hold workers compensation insurance.* However, if you do not have any employees as a sole trader, you aren’t eligible to take out workers compensation insurance.
This brings up a serious question: How would you or your family get by if you’re injured and forced to take time off work to recover?
You could consider an income protection policy instead, which may pay a cash benefit to you if you’re unable to work due to serious illness or injury.