For many sole traders, starting up their own business can be the realisation of a life’s dream. There are plenty of upsides to being your own boss, like choosing your own hours and knowing that the money you’re bringing in doesn’t have to be passed on to shareholders or partners.
Of course, a sole trader will also have to shoulder the burden of running the business themselves and that includes making sure they have the right insurance cover. Shelling out for sole trader insurance may seem like another mounting expense, but it could well be a lifesaver for your business.
So what sort of cover does a sole trader need to look for?
The key to any business insurance policy, public liability insurance is the thing that can help you as a business owner sleep at night. It’ll protect you if a customer or member of the public makes a claim against you if they have been injured or suffered loss or damage to their property because of your work. Public liability for sole traders will help meet the cost of any compensation which is to be paid to a claimant and will cover your legal expenses too.
This may be especially helpful to those in the service industry or for those who dispense advice, such as consultants – however, it’s also useful for certain types of self-employed workers. It covers you for claims by a client who has suffered financial loss due to your work. So, for example, a client may claim that they received incorrect advice from a financial consultant about investments and as a result lost money.
Professional indemnity also covers more hands-on work. A shop fitter could be the subject of a claim if their poor work causes a shop to close for repairs and therefore lose business.
For many self-employed people, time is indeed money. When you’re not working, you’re not earning. So, if you suffer an accident and our out of action for an extended period of time, personal accident insurance can help replace your lost revenue.
Some sole proprietorships have a staff of just one. But if you need a helping hand decide to take someone on, then you are obliged by law to have employer’s liability. Even if you only have one person working for you or your staff work on a part-time basis, you must have employer’s liability cover. It will protect you and your business against claims made against you by your employers should they be injured, fall ill or suffer damage or loss while carrying out their work
Buildings & contents insurance
A lot of self-employed people work from home. However, if you are operating your business from your own house, you may need to take out special home and contents cover as normal home insurance may not cover your business practice.
If you have your own business premises, then you’ll need buildings and contents cover should anything unforeseen happen which could interrupt the smooth running of your business. Contents insurance may only cover fixtures and fittings and you be offered extra cover for office equipment, such as computers, and cash which is kept on the premises. Contents cover can also protect things like laptops, tablet computer and mobiles away from the office.
A bad workman may blame his tool, but a good one would be lost with them too. Tools and equipment are expensive so you may want to consider taking out extra cover to protect them against loss, theft or damage with .
Your regular car or van insurance may not provide sufficient cover for your vehicle if you are using it for business purposes. It’s worth checking the terms of your policy to see if you need to switch to a more suitable form of cover.