Explore Business Insurance

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.

Which business insurance policies should a sole trader consider?

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, some of these covers may even be mandatory under Australian or state law.

There is no specific insurance cover for sole traders in Australia. There are, however, many different types of insurance covers for business 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 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 negligent 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.*

Professional Indemnity

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 cover.

Professional Indemnity insurance is designed for businesses that offer specialist services or give professional 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 service or advice. Professional indemnity insurance also helps out with legal costs associated with responding to or managing claims covered by the policy.*

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Business Interruption insurance

Business Interruption insurance 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.

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.

Protection for your business assets

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:

  • Building. If you own the building from which your business operates, building insurance can provide cover for loss and damage to 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

How much cover do I need?

The level of cover you need as a self-employed sole trader will depend on a number of factors, such as:

  • The size of your business
  • Annual revenue
  • Which industry you operate in
  • Which insurances you choose
  • Past claims history.

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.

Do I need cyber liability insurance* as well?

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 is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack.

Do I need workers compensation insurance as a sole trader?

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.

Adrian Taylor, General Manager

Business insurance tips for sole traders from our expert, Adrian Taylor:

  1. 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.
  2. 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.
  3. Be sure to understand what you are covered for. It’s important to read the PDS or talk to the insurer if in doubt.
  4. 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.
  5. 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 a sole trader who needs insurance, we can help you save time finding cover. You can get a quote from a range of business insurance providers in minutes using our free 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.

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