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Public liability insurance for sole traders
As a sole trader, you and your business are legally the same, so a claim against the business is a claim against you. Public liability covers claims for injury and property damage caused by your work. Here’s what it covers, what it doesn’t, and how to compare.
- No phone number needed to request quotes
- Tools, vehicle and more in the same request
Do sole traders need public liability insurance?
It isn’t compulsory for every sole trader, but it matters more for you than for a company. business.gov.au explains that a sole trader has unlimited liability, so all your personal assets are at risk if things go wrong. Public liability is what pays a covered injury or property damage claim, instead of you.
You may also be required to hold it. business.gov.au notes that some states and territories require public liability for certain occupations, and leases, contracts, council permits and market or event organisers can require it too. Check your licence conditions and anything you’ve signed.
What it covers for a one-person business
Usually covered
- Injury to clients and the public. Someone trips over your gear on a job, or is hurt at your stall.
- Damage to other people’s property. You damage a client’s floor, car or fence while working.
- Legal costs of defending a covered claim.
- Products you sell, when products liability is included.
Not covered by public liability
- Your own injury or illness. Public liability never pays you if you can’t work.
- Your tools, equipment or vehicle. These need their own cover.
- Advice or design mistakes. That’s professional indemnity.
- Anyone you employ. Hiring brings workers compensation obligations.
The full list of inclusions and exclusions is on our public liability insurance page.
Common sole trader situations, and what to check
| If you… | Check |
|---|---|
| Subcontract to a builder | The minimum limit in the subcontract, and whether they need a copy of your certificate of currency before you start. |
| Work in clients’ homes | That your occupation is described accurately, including any work at height or with hazardous materials. |
| Run a market stall | The organiser’s minimum limit. Some stallholders only trade on certain days, so ask about day or seasonal cover. Market stall insurance |
| Give advice as well as a service | Whether you also need professional indemnity, for example as a consultant, personal trainer or designer. |
| Work from home with client visits | Whether your home and contents policy covers business activity. Don’t assume it does; check the PDS. |
| Hire your first worker | Workers compensation. business.gov.au notes that employers have workers compensation obligations. |
What it costs a sole trader
The same factors apply as for any business: your occupation, the limit, turnover, claims history and how you work. Lower turnover and no staff can help, but the occupation and the limit still drive most of the price. In NSW, a small business with turnover under $2 million can make a declaration that removes stamp duty from public liability.
Our public liability cost guide breaks down the premium, GST and stamp duty by state.
The gap most sole traders don’t notice
Public liability protects you from claims by other people. It does nothing if you’re the one who can’t work.
- You’re injured or sick and can’t earn.That needs personal accident and illness cover, or income protection, which a licensed broker arranges.
- Your tools are stolen from the ute.Tools and equipment insurance covers the gear you earn with. Tools insurance
- Your work vehicle is damaged or written off.Commercial vehicle insurance covers a ute or van used for work. Commercial vehicle insurance
How to compare as a sole trader
Sole trader questions
Is public liability insurance compulsory for sole traders?
Not for every sole trader. Some states and territories require it for certain occupations, and leases, contracts, councils and event organisers can require it. Because a sole trader has unlimited liability, a claim can reach your personal assets even when cover isn’t required.
Do I need an ABN to get public liability insurance?
You don’t need an ABN to compare quotes with us. The insurer asks for your business details, including your ABN if you have one, when the policy is issued.
Does public liability cover me if I’m injured?
No. Public liability covers claims made by other people. Cover for your own injury or illness is personal accident and illness insurance or income protection, which a licensed broker can arrange.
Does my home insurance cover my business?
Don’t assume it does. Home and contents policies may limit or exclude business activity and business liability. Check your PDS, and compare business cover if clients visit or you keep work equipment at home.
How much public liability cover does a sole trader need?
Usually whatever your contracts, lease or permits ask for. Limits are commonly offered at $5 million, $10 million and $20 million. If nothing specifies a limit, compare the price of each before you choose.
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