For any sole trader, small business, or self-employed individual, business insurance should be an integral part of your operational expenditures. As a single incident can jeopardise your career and your livelihood, the relatively small cost of a monthly premium is worth the risk for both protection and peace of mind.
While having a smaller business or being a sole trader means you run a relatively low risk of a lawsuit, it also means having cheaper premiums for comprehensive protection. The following will outline the types of insurance and why it is imperative for any business, regardless of size, to have it.
Public Liability Claims
Being a sole trader means dealing with third party individuals, whether they are clients or members of the public. If your insurance covers you for public liability, you will be protected against any legal claims resulting from injury or damage to property while you are carrying out business activities. While it is not compulsory by law, it will give both you and your clients the peace of mind to do business together.
Accidents Affect Sole Traders
Just because your business is small doesn’t mean it is immune to accidents. For instance, if you are working as carpenter and accidentally put a nail through a pipe that results in extensive water damage, you will be responsible for the cost of repairs. If a roofer drops a tile and it lands on a passer-by, they would be responsible for the medical bills.
Another example would be a self-employed technician who loans most of his technical equipment from a third-party. In this instance, if he drops and damages the property, the self-employed individual would be liable for the repair.
Amount Of Liability Cover Required
The amount of insurance required is entirely dependent on the type of business you run, the size, and the turnover. With sole traders, it is important to get the proper cover as opposed to the cheapest one, as many of the lower priced policies are riddled with exclusions that leave you unprotected.
With a small business, your primary focus should be on building the business and the brand as opposed to worrying about potential accidents. Having a comprehensive insurance policy will allow you the peace of mind to concentrate on building clients. Furthermore, having a reliable insurance policy will do the same to potential clients, as they won’t have to worry about being compensated should something go wrong.