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How Much Does Insurance Cost for a Sole Trader?

General Insurance

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:

Public liability insurance
Professional indemnity insurance
Income protection insurance
Business insurance
Personal accident and illness insurance

Other industry-specific insurance policies to consider should be:

Truck insurance
Tool insurance
Boat insurance
Strata insurance
Cyber insurance

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.

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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.

sole trader insurance

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.

Morgan Insurance Brokers, ABN 28 628 815 074, AFSL 327131

This article originally appeared on How Much Does Insurance Cost for a Sole Trader? and has been published here with permission.