How Much Does Insurance Cost for a Sole Trader?

As a sole trader, your business and personal assets are mixed together. This makes conducting business both easy and difficult. When accidents happen, it is not just your business that takes a hit, you do as well. When building a business as a sole trader, insurance is key to ensuring long-term financial security, but the cost can vary depending on different factors.

These are things specific to your business, like the type of insurance needed, level of business risk, and any previous insurance claims.

We know that starting a business is tough, especially during a cost of living crisis, but that’s why we are here to help you choose the right insurance policies for you. Morgan Insurance Brokers are dedicated to building the perfect insurance policies for your business while keeping costs low.

Insurance for Sole Traders

Deciding what insurance you need as a sole trader can be a difficult task. It largely depends on what industry you are going into, though there are standard insurance policies that are recommended no matter the industry. These are:

Other industry-specific insurance policies to consider should be:

No matter what you go with, insurance is important for sole traders. It protects them from unexpected risks and liabilities while providing financial security and peace of mind.

Factors Affecting Insurance Costs

Asking how much your insurance will cost is like asking a fortune teller to predict the weather; it’s an incredibly complex question with no right answer. Without discussing the ins and outs of your business and providing you a quote, most insurance brokers will be hard pressed to give you any kind of straight answer. However, there are several factors that insurance companies take into account which can affect the cost of your insurance:

Industry and occupation

Generally speaking, industries like construction, healthcare, and IT tend towards having higher premiums. This is because they are considered high-risk, either because of the increased risk of injury or illness or the risk in data security.

Business size and revenue

You may be asked to declare your annual revenue when getting insurance for your business. The bigger your business, the higher your premiums may be. This could be because of a higher chance of liability claims from clients.

Location

Quite often, insurers will take into account location-based risks when looking into your insurance premiums. Things like crime rates, high risk of natural disasters such as bushfires or floods, the amount of claims made from other business properties in that area, and also if you have dealings in multiple states all affect your premiums.

Level of Coverage

If you want more insurance coverage for your business, this can also have an impact on the costs. Generally, having higher limits on liability equates to higher premiums. For example, someone who has a $30,000 liability limit on their insurance will pay a much lower amount than someone who has a $50,000 liability limit, not counting any other outside factors.

Claims history

Your premiums can increase if you had an insurance policy that you previously made a claim from. Claims affect future premiums regardless of the insurance company you were with previously. It is a legal obligation to disclose any previous incidents that influence the insurers decision to accept their risk.

Choice of insurance provider

All insurers have different price ranges, that is a simple fact, so whichever insurance package you choose will be priced differently for all businesses based on the information above. This is why it is essential to get quotes from multiple providers to make sure you are getting the best insurance package possible for your business.

Insure with Morgan Insurance Brokers

Working with an insurance broker means that you are getting specialist advice that goes far beyond what an insurance company would offer. They compare different insurance companies to tailor-make policies and so are getting the best and most cost-effective coverage possible for your business.

When you work with us at Morgan Insurance Brokers, we do all of the above and more. With more than 150 insurers working with us, we can craft the perfect insurance coverage at the lowest cost to your business.

Don’t let risk run your business, contact us for a free quote today and protect your future.

by jasper

Top Ways to Insure Your Sole Trader Business

We know starting your own business is tough, especially when there are so many different insurance options available and you have no idea where to start. For sole traders, it can seem daunting because not only do they need to protect their business but also themselves.

Getting insurance for your business, no matter how small, is always recommended. Insurance covers you in the case of unexpected financial loss which happens alarmingly often. Depending on the industry you have chosen, there are different compulsory insurance requirements. Otherwise most insurance options are optional but highly recommended.

When you look for insurance with Morgan Insurance Brokers, we make sure you and your business are well protected and have all the insurance coverage you need.

Why Sole Traders Need Insurance

As the simplest business structure for someone wanting to get their venture off the ground, sole traders make up a large portion of Australian businesses. According to the Australian Bureau of Statistics, about 61% of businesses in Australia are sole traderships.

While being a sole trader business can make things a lot easier, it also means that there is no legal distinction between you and your business. You are fully responsible for all aspects of the business, good and bad.

Insurance is incredibly important for you as a sole trader. Without it, you are fully liable for anything that happens in your business. Workers compensation is not valid for sole traders, so there are a range of insurance options recommended depending on the chosen industry.

There are a number of insurance policies sole traders need to know about at the beginning of their business venture:

Professional Indemnity Insurance

Professional indemnity insurance is an important and sometimes essential insurance policy to have for the smooth running of your business. This policy aims to financially protect you, your workers, and your business from any legal claims or allegations about any unsatisfactory advice or services given. This could be from unintentional errors leading to a clients financial loss, misunderstandings about what a product or service can provide or advice given, and any copyright claims.

The policy can cover legal costs, compensation for damages, and other losses incurred when defending your business in court; this could be against alleged or actual claims of negligence or professional breach of duty.

Business Insurance

This kind of insurance is arguably one of the most important for sole traders or small businesses. It can cover the business against significant financial loss, fires, theft, equipment breakdown, employee dishonesty, natural disasters, and accidents.

No two businesses are the same, just like no two business insurance policies! Having a policy tailored to your small business is essential to protect yourself from any unknown accidents that may set your business back financially.

Public Liability Insurance

When you have this insurance policy, it protects your business against claims relating to personal injury, property damage, and advertising liability brought against you by third parties.

For example, you have a shop full of shelving for a range of different boardgames and one of those boardgames falls on the head of a customer and they get a concussion. Any claims of personal injury against your business because of your negligence could be covered by your business insurance policy.

Personal Accident and Illness Insurance

When you have personal accident and illness insurance, the policy offers you financial assistance when an individual has an accident that results in injury, disability, or death.

If you fall ill or get into an accident while working and do not have insurance coverage, this can severely impact your business and potentially cause major financial setbacks, especially if you have no employees to cover your absence.

Income Protection Insurance

For a sole trader who relies on their business as their main source of income, this insurance policy is crucial. It is basically a safety net, providing an income source in times of need or health-related absence from work.

It is designed to cover a significant portion of your main income, replacing up to 70% of your gross income, so sole traders can meet their financial obligations. It is possibly the most important insurance policy for sole traders, self-employed professionals, and contractors.

Protect Your Business With Morgan Insurance Brokers

When you protect your business with Morgan Insurance Brokers, we do extensive research into your business. In doing this, we make sure you are getting the best insurance policies you need to conduct your business safely.

Our team specialises in insurance policies for small to medium businesses, and we take pride in building trust in our client relationships.

Are you looking for an insurance broker committed to safeguarding your business? Look no further. Contact us now for a free quote and start your journey with us today.

by jasper

Guide to Public Liability Insurance for Sole Traders

When you own a business, accidents happen. Being prepared for those accidents is essential to keep your business running long-term. That is why Public Liability is a crucial insurance coverage option, to financially protect businesses from unintentional harm done to others or their property.

What is Public Liability Insurance and Why is it Important?

Public Liability insurance protects you from any financial damages resulting from accidents or incidences caused by your business. These accidents or incidents can happen to anything or anyone, person or property. It can cover things like death or serious injury, emotional distress, property damage such as causing a fire, or consequential damage like loss in revenue or reputation for another business. 

Public Liability insurance for sole traders is important because oftentimes it means an individual and their business is a single entity, meaning if things go wrong within the business, an individual's personal finances can be affected. Public Liability insurance is not a legal requirement in Australia, however some industries do require it in order to work with clients. Public Liability is considered arguably the most important insurance coverage for sole traders, over any other self-employed business type. 

Understanding the Risks

Sole traders face a wide range of risks when they enter into a new business venture, this includes; 

  • Property damage

Property damage can mean accidental damage during a service delivery, such as a tradesperson causing damage to someone's property. Or it could mean product liability from supplying a faulty or defective item that causes damage.

  • Bodily injury

These kinds of accidents can happen on premises where visitors can come into the workplace, such as clients or delivery drivers, and they can get injured by hazards or accidents like tripping or items falling on them. Alternatively, if services provided include physical interaction, like massages, then liability for injuries sustained by clients becomes an issue as well.

  • Professional Security 

If a business releases advertisements or content that claims a competitor has been found lacking in some or all of their products, and the competitor sues for slander, this is part of what Public Liability covers. It also provides coverage for things including but not limited to infringement of copyright, false advertising, or stolen ideas. 

All of these reasons factor into why you, as a sole trader, should seriously consider including Public Liability in your insurance plans.

What are the Benefits of Public Liability Insurance?

Considering the risks above, below is a list of benefits to having Public Liability as part of your insurance coverage.

Personal Assets are Protected

As a sole trader, you are personally responsible for any financial issues incurred by your business. Public Liability insurance is an incredible asset that ensures your safety from potentially overwhelming legal costs, settlements, and judgements that can come from lawsuits surrounding advertising injuries, personal injury sustained on the premises, or property damage. 

Boosted Business Reputation

Without good insurance cover, claims of professional negligence can have a serious impact on your business's public image and reputation. When it comes to running a business, your brand reputation is invaluable. Public Liability insurance protects your public image and reputation, boosting trust for both business partners and customers, and assures partners and customers that you are a professional and responsible business. 

Fulfils Industry Requirements

Depending on the industry, some sole traders must have Public Liability insurance in order to work with clients. This is especially true with construction, with many contracts in the building industry requiring contractors to have Public Liability insurance. Similar with leased premises such as workshops and storefronts, Public Liability insurance could be a requirement for the lease. Public Liability insurance is compulsory for most trade licences, most construction and building contracts, leased premises, using subcontractors, and for some business insurance packages. 

What is Not Included in your Public Liability Insurance

While this insurance can protect you from a wide range of circumstances, there are some that it cannot, such as;

  • Deliberate acts
  • Product recall costs
  • Injuries to your employees
  • Professional advice
  • Aircraft products
  • Asbestos liability
  • Pollution liability
  • Contractual liability

It is always a good idea to have an in depth discussion with your insurance broker to fully understand the specifics of your insurance policies so you know what is and is not covered. This is why we recommend using Morgan Insurance as your chosen Public Liability insurance broker. 

Why you Need an Insurance Broker

You can sleep soundly knowing your business is properly protected from all kinds of situations. Public Liability insurance is so important for all the reasons provided above. By understanding the potential risks, you can take into account your businesses specific needs when deciding what insurance coverage to invest in. 

Insurance brokers are excellent at providing comprehensive insurance coverage options that benefit you as a business owner rather than going directly to an insurance company that will look out for themselves. Brokers can negotiate with insurers to get you the best possible deal for your Public Liability insurance, and ensure a smooth claims process in the event that a claim needs to be lodged. They also provide ongoing support and advice, monitoring your insurance policies as your business needs change. By using an insurance broker, you save time, effort, and stress knowing your insurance needs will be handled for you by professionals. 

How Morgan Insurance Brokers Can Help You

When you work with Morgan Insurance Brokers, we offer comprehensive insurance advice to a wide range of business types. Whether you are just starting up a new business, or if you are an established business looking for a new insurance broker, we are a reliable and reputable team of Public Liability brokers who are keen to find the right insurance policy for you. Contact Morgan Insurance Brokers today for an obligation-free consultation and our team can tailor-make the perfect insurance policy for you!

by Mojo Dojo