Sole Trader Insurance
Sole Traders Insurance using a Qualified Insurance Broker
Sole Trader Insurance
Insurance for Sole Traders using a Qualified Insurance Broker
Sole Trader Insurance - Your Guide to Insurance
Sole Trader Insurance is vital for safeguarding your personal assets from the potential legal and financial repercussions that come with operating a business. This form of insurance is specifically tailored to meet the unique needs of sole proprietors, offering a layer of protection against a range of risks that can arise in the course of business operations.
This resource page is designed to offer you detailed insights into the typical incidents and situations that sole traders frequently encounter, which often necessitate lodging insurance claims. Understanding these common scenarios will help you better appreciate the importance of insurance coverage and guide you in making informed decisions about the types of protection you need to secure your business and personal livelihood.
Insurances a Sole Trader should consider
- Public Liability Insurance
- Workers Compensation Insurance
- Motor Vehicle Insurance
- Personal Accident Insurance or;
- Income Protection Insurance
- Motor Vehicle Insurance
- Professional Indemnity Insurance
- Cyber Insurance
Do I need Public Liability Insurance as a Sole Trader?
Public Liability Insurance is crucial for sole traders to protect against claims of damage or injury and meet requirements where requested and mandated. Below are a few scenarios in which you’ll find yourself needing Public Liability Insurance.
Your clients request a copy of your Certificate of Currency
In Australia, it has become a standard practice for businesses to request a copy of your Public Liability Certificate of Currency before engaging you for work. This certificate serves as proof that you hold active public liability insurance, which, while not legally mandatory for most industries, is crucial in providing protection against claims for property damage or personal injury that may occur during the course of business operations.
To provide you with financial protection in the event of property damage or injury
Public Liability Insurance covers the costs associated with defending your business against claims of injury or property damage caused by your business operations. This can include legal fees, court costs, and any settlements or awards that might be granted to the claimant.
It's mandatory for certain industries to obtain licensing
Public Liability Insurance is mandatory for certain industries as part of their licensing or regulatory requirements. For example, but not limited to:
- Electricians
- Plumbers
- Builders
Your property lease requires it
If your property lease requires Public Liability Insurance, it’s important to maintain compliance with this requirement to safeguard your tenancy and business operations. Ensuring that your policy is up to date and meets the coverage amounts specified in your lease agreement is crucial for fulfilling your lease obligations and protecting your interests.
What Does Public Liability Insurance Cover?
Public & Products Liability Insurance will protect sole traders from the legal costs that arise in the event that something goes wrong. Accidents happen, and your Public Liability policy will protect you from injury or property claims that you're liable for.
Property Damage Claims examples:
- Damage to glass by a cleaner
- Painter spills paint on timber floors and they need replacing.
- A Gardener is mowing a lawn and a rock leaves a chip in the windscreen on a nearby car
Product Liability examples include:
- A cakemaker sells their baked goods and a client suffers from food poisening.
- Your manufacturered items causing personal injury
Personal Injury Claim examples
- A consultant has guests in their office and slipped over furniture and injured themselves.
- Your subcontractor trips over on site.
- A homebased hairdresser has a client that slipped on a wet floor whilst using their bathroom and sustained serious injuries.
What's standardly excluded under a Public Liability Policy?
Events that occur outside of your policy dates
Product recall costs
Injuries to your employees
Asbestos and Pollution Liability
Damages caused by your motor vehicles
Intentional and deliberate acts
Professional Advice and Recommendations
Claims where you have assumed Liability
Public Liability Insurance FAQ's
Public Liability Insurance cost for a sole trader could be between $600 – $1,500 a year depending on your occupation, your limit of public liability you choose, and your turnover.
A sole trader can get public liability insurance as long as they have a registered and active ABN.
The best insurance for a sole trader is a public liability insurance policy that will cover their activities with no restrictive conditions. With Morgan Insurance Brokers working with you, we can secure a policy that will protect your business without breaking the bank.
Public Liability insurance will cover a sole trader and their employees for third party injury and property damage in which they are liable for.
Personal Accident & Illness Insurance
A Personal Accident and Illness policy can pay you a lump sum benefit for injuries that you sustain, along with a weekly sum for a period until you’re able to return to work.
What's typically excluded under a Personal Accident And Illness Policy?
Pre existing injuries
Injuries that occurred before your policy start date
Injuries that occurred whilst paying professional sports
Individuals over 75
Benefit periods longer than 2 years
Criminal Acts/Alcohol/Drugs
Mental illness
Suicide
Workers Compensation Insurance
Do I need Workers Compensation Insurance if I am a Sole Trader?
Workers Compensation Insurance is a compulsory insurance that is goverened by each state and territory in Australia. This will compensation for wages and medical expenses in the event your employees were injured at work.
Even though you are a sole trader, if you hire any employees, or have any subcontractors that fall within the definition of a “worker”, you will need to ensure you have workers compensation Insurance.
Find out more about your relevant state Workers Compensation Insurance Requirements
Queensland: Queensland WorkSafe Workers Compensation Website;Â
New South Wales: NSW iCare Workers Compensation Website;Â
South Australia: Return To Work South Australia Workers Compensation Website;Â
Western Australia:Western Australia Work Cover Workers Compensation Website;Â
Victoria: Victoria Work Safe Workers Compensation Website;Â
Tasmania: Tasmanian Work Safe Workers Compensation Website;Â
Northern Territory: Northern Territory Work Safe Workers Compensation Website;Â
Australian Capital Territory: Australian Capital Territory Work Safe Workers Compensation Website;Â
Tool Insurance
Replacing all of your tools at once because of a theft or fire is extremely expensive. Fortunately, tool insurance is a cheap solution.
What's Covered
Accidental Damage
Collision whilst in transit
Theft
Fire, Flood, Storm
What's Excluded
Theft In Open Air (unless requested)
Electronic Breakdown
Items over $2,500 (unless specified)
Theft without forcible entry
Sole Trader Insurance with Morgan Insurance Brokers
Morgan Insurance Brokers are specialists in protecting sole traders nationwide and will provide a professional service.
We provide peace of mind that your business will succeed when engaging Morgan Insurance Brokers as your preferred business insurance broker.
Frequently Asked Questions
A sole trader is an individual that runs a business and is responsible for all aspects of the business, including debts and losses.​​
You can read more on the Australian Governments website.
Australian Government Information About Becoming a Sole Trader
Sole trader structures are very easy to set up, with minimal costs involved. Standardly, you’d only need to register an Australian Business Number with the Australian Tax Office, and this then will enable you to trade.
As the individual responsible for the business and it’s operations, you are personally liable for anything that goes wrong. This means your personal assets such as your car or home are exposed.
If you employ staff, you are required by law to hold Workers Compensation insurance. Workers compensation insurance covers:
- Out of pocket medical expenses
- Lost wages
- Rehabilitation costs
Other insurance policies are not legally mandatory, but are recommended.
Morgan Insurance Brokers has the facilities to offer sole traders the option to pay their insurance premiums over 12 flexible monthly instalments.
Fortunately, the benefit of obtaining Public Liability Insurance through a broker means that your dedicated Broker will approach a large panel of approved insurers on your behalf. Your Broker will be able to source you the cheapest, most comprehensive policies available.
- Same day Certificate of Currency
- Cheap premiums
- High levels of cover
- Flexible excess options
- Flexible payment options
- No admin charges to make changes to your policies
It will protect sole traders from the legal costs that arise in the even that something goes wrong. Accidents happen, and your Public Liability policy will protect you from injury or property claims that you’re liable for.
If you are changing to a Pty Ltd company structure, your insurances will need to be updated to reflect your correct entity and affiliated ABN.
The rate is calculated by your occupation, wages, and claims history.
At the end of the policy period, you will declare how much you actually paid in wages, and then either pay an additional top up, or are refunded if you’ve over projected.
Broadform Liability Insurance and General Liability Insurance are terms that people use to refer to Public & Products Liability insurance. Broadform Liability Insurance will property damage, personal injury and Products Liability. It is common to have products liability insurance automatically covered, however, it’s wise to check your policy details to confirm.
Public Liability Insurance is designed to protect third parties from loss, damage, or injuries as a result of your work and services. If the work that you’ve done for your client was defective, (say for example, incorrect conrete pour) then the costs that you incur to redo the work will not be covered by insurance.
The limit of Public Liability that you should insure for is dependent on who your clients are.
There is the option to insure for $5M, $10M and $20M.
The waiting period on your Personal Accident and Illness cover ranges from 7 days, 14, 21, or 28 days.
Claims for COVID19 may attract longer wait times.
Tools less than $2,500 are automatically covered.
