Working as a sole trader or freelancer opens up many possibilities. Whether you’re a photographer, plumber, graphic designer, or manage an internet store, sole traders and freelancers all have one thing in common: the need to secure their business.

Let’s start by looking at one of the most basic business insurances, public liability insurance.

What is Liability Insurance?

What would happen if a client, supplier, or member of the public was injured or property was damaged due to your negligent business operations.

Public liability insurance is one of the key types of insurance that businesses must consider. It applies to any profession that interacts with third parties, including clients, customers, and suppliers.

What does public liability insurance cover?

• Injuries to third parties (customers, suppliers, or members of the public)
• Third-party property damage caused by your irresponsible business actions
• Legal and defence fees for covered claims

What is usually not included in public liability insurance?

• Employee injuries
• Own-property damage
• Repairing defective workmanship
• Professional mistakes

In what situations will I need public liability insurance?

Just a few situations in which sole traders and contractors may need public liability coverage are as follows:

• Clients visiting your home-based business run the danger of being injured or having their belongings damaged. Slips, stumbles, and falls can result in injury claims.
• Market stall owners may be obliged to obtain their own Public Liability insurance.
• To train and exercise with customers in a public setting like a park, you may need to acquire Public Liability insurance. Keep a copy of your currency certificate with you in case you need to produce one.
• If you operate a mobile business, your Public Liability policy covers you everywhere in Australia. This gives you peace of mind if you cause unintended damage or harm while visiting a customer.

Professional Liability Insurance

Professional Indemnity Insurance is of use to firms that provide specialised services or advice. Architects, graphic designers, engineers, accountants, and life coaches are examples of sole traders and freelancers who may require Professional Indemnity insurance.

Your organisation may be held liable for losses arising from actual or alleged negligent acts or omissions in the supply of professional services or advice. Professional Indemnity Insurance can also help with legal fees connected with responding to or resolving claims.

Some causes for a Professional Indemnity claim include:

• Giving bad counsel
• Misdiagnosis or treatment
• Making a mistake

Depending on what professional indemnity policy you have in place, you may be covered for:

• Compensation for a claim including, but not limited to, court-ordered damages
• An award of legal fees
• Actual defence or legal response fees
• Expenses associated with legal coverage

The following are commonly excluded from professional indemnity policies:

• Wilful damage
• Contingency fees
• Fees for services
• Known claims and events
• Fraud and deceit

Indemnity insurance is important for sole traders and freelancers.

You take pride in providing professional advice and services to your clients, but even with the best intentions, mistakes can occur. Professional Indemnity Insurance protects you when you need it the most.

Some Professional Indemnity policies may even cover PR-related charges; check with your insurer.

Insuring a business

Business Insurance* covers your business contents, stock, tools, and commercial property in the event of an insured occurrence (such as fire, storm, theft or even accidental damage).

A Company Insurance policy may also cover portable equipment, glass, tax audits, and revenue loss due to business interruption.

A sole trader or freelancer’s firm has several moving elements. Tools of the trade and company assets help you connect with clients and get the job done. Consideration of protection for these is an investment in your company’s future.

These are some of the options for Business Insurance coverage.

Interruptions* Business interruption insurance protects against loss of income and increased operating costs caused by an insured event (such as damage to property or fire). It helps your company recover from an insured disaster by covering continuing costs (such as wages or rent).

The typical coverage includes the following:

• Loss of revenue due to property damage caused by an insured occurrence
• Work-related expenses

Contents* Covers your business contents or stock in the case of a fire, storm, malicious damage, or other covered disaster. Even if you run a home-based firm, your business items are likely to be excluded.

A Contents insurance policy typically covers* the following insured events:

• Fire
• Adverse weather events
• Earthquakes
• Damage and vandalism
• Defectiveness

Typical exclusions* from a Contents Insurance coverage include:

• Degradation or wear and tear
• Intentional harm
• Insect or animal damage
• Rust, mildew, or rot
• Machine failure
• Software viruses or hacking
• Pollution
• An intentional power outage
• Shoddy design or build

*Audit Tax Audit Insurance protects a company’s costs if the ATO audits it. During an audit, the policy will cover the costs of accountants and other professionals. An audit can be time consuming, complex, and costly. Using an outside accountant or other professional to execute the task correctly might be highly pricey. Fortunately, Tax Audit Insurance can help.

So, what’s included?

• Accountants’ fees
• Other professional fees incurred in responding to a tax audit

What isn’t usually covered?

• Penalties or taxes
• Time, money, or missed chances
• Employee time or pay

Portable Gear* General property insurance protects against loss or damage to portable equipment used in your operation. These can be trade or stock items.

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