Tradesman Insurance for a Sole Trader
Many tradesmen in Australia operate as subcontractors or business owners, and a large number of those are sole traders.
We’ve put together a handy guide on tradesman insurance for sole traders, to help you decide what you need and how to get it.
For an instant quote on public liability insurance simply click the button below, or keep scrolling to check out the guide.
Being a sole trader keeps things simple in terms of accounting and paperwork, however there are still certain types of insurance that you will need to look at.
Insurance for Sole Traders
As a sole trader you are in a fairly exposed position. Because you and your business is regarded as a single entity, if anything goes wrong you can find both your business and personal assets at risk.
So if you cause property damage or personal injury to a third party and are sued for $100k, and you don’t have that sort of cash laying around, your house is at risk of being taken.
As a Pty Ltd company this generally wouldn’t be the case, as your company is being sued and only the assets of the company are at risk.
This makes it absolutely vital for a sole trader to have public liability insurance.
Also as a sole trader you do not have access to sick leave or workers compensation, which can leave you exposed if you are unable to work for a period of time for any reason.
Thankfully both of these risks can be covered be tradesman insurance for sole traders.
Public Liability
This is the most common form of insurance required by sole trader tradesmen.
If your work activities result in property damage or personal injury to another person you will be liable for their financial costs.
These costs can include repair, replacement, compensation, medical bills and even loss of income. In some cases these claims can stretch into the hundreds of thousands, and potentially millions.
As a sole trader you would normally be liable for these costs. If you can’t meet the costs, you face the prospect of being sent bankrupt and losing your family home.
A public liability insurance policy can protect you from this fate. Provided that the claim is covered under your policy wording, the insurance company will cover the full costs without you having to dig into your own pockets.
Public liability is mandatory for some tradesmen. Some tradies will require it due to licensing requirements, whilst others will have requirements imposed by the building and construction companies they are working for.
Regardless of whether or not it’s mandatory in your case, public liability is one of the most important forms of sole trader insurance available.
Income Protection
Another very important and fairly common form of insurance for tradesmen is income protection.
As a sole trader you have no access to sick leave or workers compensation, and therefore any absence from work will mean that your earnings stop. If this happened you may not be able to keep paying your bills for more than a few months.
Income protection can help in this case, as it can replace up to 75% of your income if you are unable to work for a period of time due to illness or injury.
The monthly benefit payments from your income protection policy can help to ensure that you can keep a roof over your head and food on the table until you are well enough to return to work.
Many of the larger worksites and building companies have mandatory income protection requirements for all tradesmen working as sole traders and subcontractors.
Other
Other forms of insurance that sole trader tradies may want to consider include tool insurance, life insurance, trauma and TPD insurance.
Whilst these forms of cover are not unique to sole traders, they are still important forms of cover that should be considered by any tradesman regardless of their employment status or structure.
Sole Trader Insurance Quotes
Obtaining a quote on tradesman insurance for a sole trader is very straight forward thanks to the system we use here at Tradesman Insurance.
Simply complete our online quote request and we will put you in contact with one of the trade insurance specialists that we deal with.
They will be able to put together your quotes and help you to choose the cover that best suits your needs and budget.
Getting your insurance right is important for any tradesman, but for a sole trader there can be even more at stake. To get the protection you need simply get in contact with us or complete the online quote request form.
