What is Sole Trader Public Liability Insurance?


Sole traders enjoy a certain freedom that isn’t afforded other business owners. They don’t have to worry about shareholders or a board of directors. However, this means that the main burden of protecting their business falls on them and that’s why it is essential to have sole trader public liability in place.

Public liability insurance for sole traders

Perhaps more so than for any other type of business, public liability insurance is an absolute must for a sole trader. In some cases, it can make the difference between a company staying afloat or going under. Public liability is designed to fight your corner if you have had a claim made against you by a customer or member of the public.

Claims can be made for a number of reasons. If a customer or another person has been injured or fallen ill as a result of the work that your company carries out, they may seek compensation. Likewise, if a person claims that their property has been damaged, they make seek to recover the cost of the repairs from you. As a sole trader, the liability falls on you and so public liability cover will help you contest any such claim and pay out any compensation that is awarded to the claimant.

Even if the claim is ultimately rejected, your public liability insurance will help towards the legal costs involved in defending your company.

Professional indemnity insurance

Most public liability policies for sole traders will include professionals indemnity cover. A lot of sole traders are self-employed consultants, such as financial advisors, and dispense advice. If a customer follows your advice, suffers a loss and then decides that your advice was poorly dispensed, they may seek compensation. Advice can range from what investment to make or what product to use.

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Similarly, if you are a hands-on tradesman, a customer may decide that your work isn’t up to scratch and sue for professional negligence. They may decide that they have suffered financial loss due to your work and take a case.

Professional indemnity will protect your interests in all of these cases by helping you contest any claims made against you.

Limits & excesses

All sole trader public liability insurance policies will come with an indemnity limit, that is the maximum amount your insurer will pay out to settle any single claim. Indemnity limits are usually £1 million, £2 million and £5 million, and depend on the size of your operation or the perceived risk involved.

All policies also come with excess, which is the amount you will have to pay out of your own pocket towards any claim. This figure is usually around £250, but again that can vary between policies.

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*This indicative price is for £1m public and products liability, £250,000 legal expenses, £10,000 financial loss and £10,000 accidental death insurance cover for a sole trader. The price includes insurance premium tax and our admin charge. 22% of new customers paid less than £59 between 1st January 2019 and 31st August 2019. The actual price you pay will depend upon your specific business requirements and will be affected by your trade, your claims history and the optional covers you select which are all priced separately during the quote process. This website is intended for customers based in the UK and is therefore subject to the UK regulatory regime(s) © Copyright 2021 Tradesman Saver | Tradesman Saver and Henry Seymour & Co. are trading names of Barkdene Limited which is authorised and regulated by the Financial Conduct Authority (FRN 303965) for our insurance distribution and credit broking activities. Barkdene Limited is a credit broker not a lender. You can check this on the Financial Services register https://register.fca.org.uk/.
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