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Public Liability Insurance Sole Trader

Tradesman Insurance

Read our guide and compare tradesman insurance quotes

By Kevin Pratt on Wednesday 25 May 2016

As a tradesman, it is important that you have the necessary business insurance cover to protect you against a number of eventualities.

In this Article

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We’ve examined the typical covers below to help you find the right cover level for your individual circumstances, or you can hit the ‘get a quote now’ button above to start your quote.

Who needs it?

Tradesman Insurance is important for both sole traders and businesses with employees. Public liability insurance is the backbone of the policy, and is complemented by a range of other covers which can provide protection for other aspects of your business.

For example your tools can be covered, as can stock, buildings or hired in plant equipment.

How does tradesman insurance work?

You can usually tailor your tradesman insurance policy and choose only the cover that you need for your business. There are a range of cover options that you should consider, here are the core ones:

Public Liability: Public liability includes cover against injury or death of third party persons, or damage to third party property from incidents arising as a result of your business activities.

Professional Indemnity: As a professional you are selling your knowledge and expertise to customers – you may be doing so in a number of different ways including providing consultancy and advisory services and perhaps producing designs.

Professional indemnity insurance can offer protection in situations when you make an error in your work, or give to a client that isn’t up to scratch. The client may file a claim against your business for compensation if they suffer financial loss as a result of this.

In this situation you could be faced with legal costs that could cripple your business, regardless of whether you feel the blame resides with your company or not. Professional Indemnity insurance can cover the cost of any ensuing compensation, the legal costs you might be faced with, and help to keep your business on its feet.

Buildings Cover: You can take out buildings insurance to cover your business premises.

Business / Office Equipment: Provides cover for business equipment whether it is lost, stolen or accidentally damaged whilst in the UK.

Tools: Covers your hand tools & power tools in the event of loss, theft or accidental damage. You can also choose to include tools whilst left in your vehicle overnight.

Contract Works: As a contractor working on site, contract conditions may make you responsible for the works and materials whilst on site. Cover can be provided up to £500,000 depending on the nature of your contracts.

Stock: Provides cover for stock, materials in trade and customers goods for which you are responsible.

Own Plant: This provides cover for accidental loss of, or damage to, an item of your Plant.

Hired in Plant: Provides cover for your legal liability under the terms of your hiring agreement to pay compensation for damage to hired-in plant

How do I choose the right policy?

Moneysupermarket.com has partnered up with Simply Business to allow you to compare the major insurers in one quote.

Although there are many similarities between insurers, cover levels and conditions do differ, so you should ensure that you choose the right product for your business by reviewing each of the covers on a 1 by 1 basis.

To compare business insurance policies, please hit the “get a quote now” button above.

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Insurance For Sole Traders

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Many people enjoy the simple structure of being a sole trader, but it does mean that you have more than most to lose if things go pear shaped in your business.

Unlike a Pty Ltd company, you and your business are a single legal entity, which means if things go wrong in your business it can easily affect your personal finances.

This is why insurance is arguably more important for a sole trader that it is for any other business type.

Public Liability for a Sole Trader

If your business has even the slightest risk exposure to causing property damage or personal injury to another person, public liability insurance should be considered an absolute must.

When you cause damage or injury as a result of your business activities you are liable for all costs that the person suffers as a result.

In a minor event this could simply involve a few hundred dollars to replace or repair their damaged property, but if an incident results in major injury or even death, the figures can potentially climb into the millions.

As a sole trader you and your business are jointly liable for these costs, and if you cannot settle the claim using your own money you will most likely be forced into personal bankruptcy.

As scary as that sounds, you can easily avoid this situation by having adequate public liability insurance in place for your business.

With the right cover in place, a claim relating to property damage or personal injury caused by your business will be covered by your insurance rather than impacting on your own financial situation.

Obtaining Cover

Despite the high level of cover which the insurance provides, taking out public liability is actually very straightforward for most sole trader businesses.

Your insurance broker will ask you a number of questions about your business, and in most cases they will be able to provide quotes and cover within a very short time-frame.

You can also obtain cover directly from a number of insurance companies via their websites and call centers, but when it comes to business insurance we strongly recommend using a licensed broker or adviser.

Insurance Costs

The cost of public liability cover for a sole trader will depend heavily on the type of work they undertake and the size of their business in terms of annual revenue.

As an example, the public liability cost for a sole trader carpenter working on residential projects only can be from as low as $450 per year.

If you undertake more complex or higher risk business activities, or if you work in locations which are considered to be hazardous, the cost of your insurance can rise considerably.

The best option for finding out the cost of your insurance is to request a quote from a qualified broker. Through our website you can do just this by clicking on our online quote button.

Other Types of Insurance

Although our website specialises in public liability insurance, there are other forms of cover which sole traders should consider.

One of the most important is income protection. As sole traders do not have access to sick leave or workers compensation, an income protection policy is one of the few ways of avoiding financial hardship whilst being unable to work.

You can find more information on income protection insurance by following this link to our dedicated page.

For more information on insurance for sole traders you should speak with your insurance broker or financial adviser.

Tradesman Insurance for a Sole Trader

Home » Blog » Guides » Tradesman Insurance for a Sole Trader

Many tradesmen in Australia work for themselves as subcontractors or business owners, and a large number of those are sole traders.

For an instant quote on public liability insurance designed just for single-worker businesses, simply answer the three questions below:

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.

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.

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 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.

How much does public liability insurance cost?

The average UK annual public liability insurance premium costs £119.37, according to AXA. However, some small businesses and sole traders will pay less than that and it can be as little as £40 a year.

AXA says 10% of its customers paid £59 for annual public liability insurance between January and March 2018. Get a quote from AXA online here.

The cost will depend on a number of factors, including the size of your business. Our research found the average cost across all business types is £796.30. We calculated the cost by dividing the size of the public liability insurance market by the number of UK businesses, which equals £796.30 a year or £66.40 a month.

Bought By Many members can get 20% off AXA business insurance through our builder, carpenter, plumber, electrician, and painter and decorator insurance groups.

Our small business insurance comes with a choice of £1m, £2m or £5m of cover for public and product liability and the option to add cover for personal accident, employers’ liability, and tools and equipment.

To give you an idea how your trade can affect the cost, AXA says the average price for builders is £158.36 but for carpenters it’s £111.20.

You can also get a quote from Direct Line to find out how much your cover will cost. It offers up to £10m of cover and says 10% of its customers paid £54 or less between 1 May 2017 – 31 October 2017. Its policies are underwritten by U K Insurance Limited.

Public liability insurance definition

Public liability insurance is not a legal requirement but will protect your business in the event a member of the public is injured or their property is damaged in your premises or as a result of your work in their home. Many companies or events may require you to have it before they will work with you.

It’s available for all businesses including market stalls, shops and food trucks. Public liability is also worth considering if you’re self-employed or a freelancer, for example, a tradesman, photographer or mobile hairdresser.

However, it does not cover injuries or claims relating to yourself or your employees. You’ll need employers’ liability for that.

Four factors that impact the cost of public liability insurance

Public liability prices

It’s difficult to provide examples of public liability costs for different jobs because there are so many factors that influence quotes. But here are some starting prices and cover levels:

    Axa says 10% of customers paid £59 or less. It offers up to £10m of cover.

Direct Line says 10% of customers paid £54 or less. It offers up to £10m of cover.

Hiscox does not provide starting prices but a quote for a freelance fashion consultant (this job gives an idea of an inexpensive quote) was £50.37 a year. It offers up to £10m of cover.

  • PolicyBee does not provide starting prices but a quote for a fashion consultant was £43.80 a year. It offers up to £5m of cover.
  • Cheap public liability insurance

    Public liability insurance can be relatively inexpensive without any deals or special discounts.

    As you can see above, the average price businesses or self-employed people pay works out at about £10 a month and many people will pay less than that.

    Remember that the cheapest liability insurance is not always the best as it may not include the same features or cover levels as a policy that costs more. However, if you know you’re comparing products with the same levels it makes sense to shop around to find the best value insurance.

    You can compare prices using comparison sites or by getting quotes from individual companies.

    Bought By Many does not feature on comparisons sites but our public liability is designed to offer some the cheapest prices for certain trades.

    How to get cheaper public liability insurance

    There are a few techniques that can influence and potentially lower the cost of liability insurance.

    You could avoid certain jobs that may increase the cost of insurance, for example, disposing of fumes or harmful waste. Or you could adapt your business so that you won’t need additional cover. If you remove your tools from a van overnight you won’t need the policy option that covers the risk of theft from a vehicle at night.

    Obviously, these techniques won’t be practical for everyone and you should always consider cover that is useful for your business but it’s worth thinking about the things you can do to lower your price.

    Make sure you understand the insurance options so that you don’t end up paying more for limits or features you don’t need. On the flip side, you need to know if you’re leaving your business exposed to risk if you’re trying to save a few pounds on insurance.

    What you need to know when you get a quote

      How much cover you need Cover levels of £1m, £5m or £10m are readily available from most insurance companies. The level you need will depend on the size of your business, the risks associated with your profession and where the business is based. Local authorities may require businesses they are working with to have at least £5m of cover. Check with potential insurers to work out your needs.

    How long you need the cover for Most policies from big insurers will cover you for a year. You may be able to find temporary or short-term cover for a one-off event but be sure to shop around, you might find an annual policy is better value. If you’re getting married your wedding insurance should have an option to include public liability if it doesn’t come as standard.

    No claims bonus If you’re shopping around for a new provider don’t forget to let them know how many years you have had cover without making a claim. Like car insurance, you can keep premiums down if you have a no claims bonus.

  • Is professional indemnity right for your work? If you’re a self-employed IT contractor, consultant or web designer you may need professional indemnity cover as well as or instead of public liability. Indemnity insurance covers you if there are claims because of mistakes or poor quality work provided by a specialist. We’ve teamed up with PolicyBee, which also offers public liability, to offer a 10% discount to Bought By Many members. Find out more here.
  • As mentioned earlier, you may also need employers’ liability to cover any staff.

    Find out more about professional business insurance with our groups for people with pet companies, IT contractors and web designers.

    Sole Traders Insurance

    Heading out on your own? You’ll find the sole trader business insurance you need at Towergate.

    • Cover for as range of different business types
    • Build a sole trader insurance package around your business needs
    • Includes options public, employers’ or product liability insurance for sole traders

    Get a sole traders insurance quote and buy online

    Need a quote? Call us and we’ll guide you through the process

    Mon – Thu 8:30am – 7.00pm, Fri – 8:30am – 5.30pm, Sat 9:00am – 1:00pm
    Can’t get through right now? Request a callback

    What does sole trader insurance cover?

    We cover a range of businesses

    Whether you work from home, are a mobile caterer, run a shop or an online business; we have options you can choose from to protect your way of working. We also insure a multitude of different types of business, you could run a fish mongers or a cobblers either way, we’ll help you to find the most suitable cover. There are still limits to what we can do and market traders and asbestos contractors are trades we can’t cover.

    We offer a range of features

    It might be that all you need to cover is sole trader public liability insurance. As such we’d help to arrange a basic policy for you. By contrast, some businesses will require cover for employees, equipment, buildings and more. In this case we can put together a bespoke package for you which combines the elements you need into one insurance package. Some things (e.g. cover for tools left in a vehicle over night) won’t come as standard so it’s worth being thorough with what you need.

    Encouraging your business to grow

    As you and your business grow and change we can adapt your policy to suit your new circumstances. If you’re a mobile caterer and you decide to purchase permanent premises, if you gain more employees or if you don’t need as many; we can alter your policy as and when you need us to. Just let us know when things change and we’ll take a look at how we can help. Just remember that your premium may change too.

    Helping you choose from a panel of insurers

    Once we’ve established the type of business you run and identified your businesses individual needs, we can go to our panel of insurers and find the best suited policy at the most reasonable price. The insurers we use are shown below and it’s likely you’ll recognise some familiar names.

    Sole Traders Insurance Claims

    If and when it comes to the crunch and you need to make a claim, we’ll send the details of your claim to the insurer to get your claim resolved as quickly as possible.

    If there are any complications with your claim, we’ll follow this up with the insurer and keep you updated with the progress of your claim.

    Need some assistance?

    If you need support from our team you can call them on:

    Sole Traders Insurance Articles & Guides

    We’ve got a whole hub of information about the different things we insure, here are a few that might be of interest:

    10 Tips for Sole Traders

    Here are some top tips to keep your business running smoothly with our sole trader insurance.

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    Liability Insurance: An Infographic Guide

    If you’re a business owner, the likelihood is you’ll need some liability insurance. Our infographic explains why it’s so important to get covered and the circumstances in which you’ll need public, professional, employers, product and director’s and officer’s liability insurance.

    Sole Traders Insurance FAQs

    What is public liability insurance and why do I need it?

    Public liability insurance is very often required by businesses as part of their insurance package. It covers your legal responsibility to provide compensation if a member of the public is injured, or has their property damaged as a consequence of an accident directly linked to negligence on behalf of your business.

    How much liability insurance do I need?

    We can advise you on the different kinds of liability insurance your business will require like whether you need employer’s liability of product liability.
    What we can’t tell you is the limit of the sole traders liability insurance you should take out. It’s very unique to your business and may sometimes be influenced by local councils or authorities. If you’re struggling to figure out what you need it’s worth speaking to local authorities and councils to see if they have a minimum requirement you should adhere to.

    What is product liability cover and why do I need it?

    Product liability cover insures your legal responsibility for the products you make available to the public. If you serve food this could be related to a case of food poisoning. If you sell specific products it could be to do with injury caused by the malfunction of one of those products which subsequently causes injury or damage to a third party or their property. It depends on your type of business but our team can help advise on whether it’s something you need or not.

    Can I pay in instalments?

    To help you spread the cost of your premiums, we offer a quick and easy direct debit scheme for spreading payment over ten months. Please visit our dedicated Direct Debit page to find out more.

    Can we help you with anything else?

    At Towergate we don’t just insure business, here are a few other policies that may be of use to you:

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