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What insurances do sole traders need?

Mar 06, 2023
Views: 585

Professional Indemnity Insurance Small Business Insurance Liability Insurance Business Interruption Insurance Trades Insurance Workers Compensation Insurance Professional Services Insurance Tradies Insurance Commercial Property Owners Insurance Professional Services for Trades Insurance

As a sole trader in Australia, there are a number of insurances that you may need to consider depending on your business activities and circumstances. Operating as a sole trader means that your business or commercial operations are carried on under your own name, via an ABN, and not through a company or trust. There are pros and cons to operating as a sole trader. On the one hand, it is easier to set up and commence operations and may require less administration or paperwork. However, when you operate as a sole trader, then you may be exposing yourself to great potential risks and liability due to the lack of an entity such as a company or trust that can provide greater levels of personal protection.

So what insurance might sole traders need to consider?

Here are some of the common types of insurance for sole traders in Australia:

Public Liability Insurance: This type of insurance covers you for damage or injury to third parties caused by your business activities.
Professional Indemnity Insurance: This type of insurance is designed to protect you if you provide professional services or advice and a client suffers financial loss.
Commercial Property Insurance: If as a sole trader, you are the owner of the premises or building you are working out of, then you should consider commercial property insurance.
Business Interruption Insurance: Depending on your circumstances and areas of work, you may consider business interruption insurance to provide coverage if your ability to trade is reduced.
Workers' Compensation Insurance: If you have employees, you will need to take out workers' compensation insurance to cover their medical expenses and lost income if they are injured at work. Every business with staff is required to have workers' compensation.

It's important to note that these are just some of the common types of insurance for sole traders, and you should speak to a qualified insurance broker to determine what insurance cover is right for you and your situation.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

ADVISR, ABN 17 613 588 266