Insurance for Sole Traders

Public Liability insurance covers you if a third-party claim that your negligent business activities caused them injury or property damage. This includes defence costs cover.

There are many types of insurance that a sole trader may consider for their small business. Here are three popular options:

Public Liability is one of the most common types of cover for sole traders. It covers you if a third-party claim that your negligent business activities caused them injury or property damage. This includes defence costs cover.

Professional Indemnity is often required for sole traders to receive a professional license. It covers you for losses claimed by a third party and defence costs due to alleged or actual negligence in your professional services or advice.

Personal Accident & Illness insurance provides a weekly income benefit following an accidental injury or illness once signed off from work by a medical practitioner for a set amount of time. BizCover also has insurance options to help sole traders protect their business assets, manage cyberattacks, prepare for business interruptions, and more.

Insurance for sole traders can cover a wide range of incidents and risks, depending on the types of policies you choose. It can cover:

• Compensation claims – If your work activities cause injury or property damage to a third party.
• Legal expenses – If Including, court fees, defence costs, settlements and judgements.
• Tools and equipment – Repairing or replacing your essential business equipment, such as tools of trade, laptops, and other electronics.
• Cyberattacks – If your business is targeted by cybercrime or suffers a data breach.
• Injuries and illness – If you are injured or fall seriously ill and are unable to work.

When to get insurance depends on the type of business you run and your business activities. Sole traders often buy business insurance when:
• They apply for a professional or trades license
• A client, vendor or supplier requires cover in their contract
• They lease commercial premises for their business
• Their work activities create liability or indemnity risks

Sole traders working from home may need some types of insurance. Some sole traders (such as accountants and real estate agents) are required to have insurance to maintain their professional license, even if they work from a home office or are self-employed. Clients may also require insurance as part of their contracts, regardless of where you do business.

Many sole traders working from home also choose business insurance to protect their business equipment, tools, records, and other business assets. Homeowners policies typically do not cover business activities. Business insurance can help protect you when working from a home office.

The main difference between Public Liability and Professional Indemnity insurance is the types of risks that each policy covers.

Public Liability insurance provides cover for legal fees and compensation costs if a customer, member of the public, or a supplier claims against you for injury or damage to their property as a result of your alleged negligent business activity (subject to the terms and conditions of your policy).

Professional Indemnity insurance covers losses claimed by a third party and defence costs due to alleged or actual negligence in professional services or advice (subject to the terms and conditions of your policy).

A Business Insurance Package is a customisable insurance bundle that can cover a variety of everyday business risks. Depending on the cover options you choose, you can protect your business contents, stock, tools, and commercial premises. Options are also available to cover business interruptions, tax audits, and more.

Most Australian businesses with employees must have workers’ compensation insurance. This applies to full-time and part-time staff, as well as casual workers.

Workers’ compensation insurance does not cover sole traders. This is why many sole traders choose Personal Accident & Illness insurance to provide a weekly income benefit following an accidental injury or illness once signed off from work by a medical practitioner for a set amount of time.

The terms “self-employed” and “sole trader” are both used to describe someone who works for themselves. Sole trader is a business structure that is commonly chosen by self-employed individuals, because it is simple and affordable to set up. However, self-employed individuals can register their business under a different business structure, such as a company.

Professionals, such as accountants and business attorneys, can help self-employed individuals decide which business structure best suits their needs.

It depends. Every small business is unique, each with their own risks and requirements. That’s why BizCover options flexible insurance options for sole traders. Pick and choose the cover options that fit your needs to build an insurance package that suits your business.

Some types of insurance for sole traders can help cover legal fees. Common options chose by sole traders include Professional Indemnity insurance, Public Liability insurance, and Cyber Liability insurance. Your policy wordings will list what is and is not covered, including legal fees and court costs.

Sole traders can make a claim online through the BizCover website.