[The following is a guest contribution]
If you’re a sole trader here in Australia, you probably love the simple structure of your business. Everything is a whole lot easier to deal with when there’s just one employee to deal with, rather than tons of employees spread out in offices all over the place! While being a sole trader gives you the power to ignore certain hassles, one thing you absolutely CAN’T ignore is public liability insurance.
First things first, what is it?
Public liability insurance (which is sometimes simply called “business insurance”) prevents someone from filing a claim against you if they suffer an injury or property damage on your business’ premises. Instead, your insurance kicks in and pays for things like legal fees, medical bills, and compensation. As a sole trader, you and your business would be jointly liable for all of these costs if you didn’t have insurance — meaning that all of your business AND personal assets would be at risk!
OK, that makes sense. But with all of the options out there, how do you choose the right public liability insurance for your specific needs?
Only compare quotes that match your daily activities
You’ll find public liability insurance quotes lurking in every corner of the web, but a bunch of them won’t apply to you. That’s because public liability insurance rates are based on the specific risk that your business faces. So, if you’re a sole trader who does bookkeeping work for clients all day, there’s a much smaller risk that anything will happen than there would be if you were a carpenter who had lots of dangerous tools sitting around.
Figure out if you need a very high cover
Many of the public liability insurance quotes you see online will come with much more cover than you need. If your annual revenue isn’t all that high, you don’t need to pay premiums on an insurance policy that gives you $10 million worth of cover. So, before you begin comparing different policies, make sure each one applies to your specific situation!
Find out what you can do to lower your payments
Simply going with the cheapest commercial property insurance quote can be dangerous, because cheap policies are typically cheap for a reason. However, many insurers will offer you a discount if you meet certain requirements. For example, there may be certain safety features that you can add to your facility — like security shutters — that will reduce the odds of someone getting injured or something getting damaged. Remember, insurance companies base all of their price decisions on risk. If the insurer thinks you have a higher risk of filing a claim than someone else does, you’re going to pay more than they do.
Luckily, even if you don’t qualify for a bunch of discounts, sole trader public liability insurance is typically much cheaper than similar policies for bigger businesses. So, you won’t have to worry about it breaking your budget.
Look for a name you trust
Typically, the big names in an industry got their big name for a reason. That’s not to say that smaller, lesser-known insurance companies can’t protect you just as well, but if you know that a certain insurance company has a great reputation, start your search with them.