Public Liability Insurance for Sole Traders in Australia | Get the Lowdown Here

As a sole trader in Australia, it’s important to understand what public liability insurance is and if it’s necessary for your business. Public liability insurance covers you and your business against claims of personal injury or property damage caused to third parties as a result of your business activities. It’s designed to protect you from potential financial losses if someone makes a claim against you for damages or injuries sustained.

Why Sole Traders in Australia should consider Public Liability Insurance

In Australia, public liability insurance is not legally required for sole traders but it’s highly recommended that you consider taking out a policy. While you may never need to use it, having public liability insurance in place can give you peace of mind if something were to go wrong down the track.

– Public Liability insurance covers legal costs and compensation claims if a third party sues you for injury or property damage.

– Sole traders In Australia are personally liable for any claims against their business, so Public Liability insurance can protect their assets and income.

Some examples of Public Liability claims for sole traders include:

• – A plumber who accidentally caused a water leak that damaged a client’s ceiling and furniture.
• – A landscaper who left a rake on the ground and a passer-by tripped over it and broke their arm.
• – A photographer who dropped their camera on a wedding guest’s foot and caused a fracture.

Number of PL claims reported by underwriting year QLD :

(SOURCE :National claims and policies database statistics | APRA)

Public Liability claims against sole traders in Australia are on the rise

Sole traders in Australia are highly vulnerable to public and product liability claims, with a significant increase in claims against them over the past 5 years, particularly in the construction industry where claims have risen by over 50%.

According to statistics, Public Liability claims against sole traders in Australia are on the rise. In 2019 alone, there were more than 5,000 reported cases of liability claims made against small business owners. This figure is a stark reminder of how important it is for all sole traders to ensure they have the right level of protection in place.

Public Liability Insurance Coverage for Sole Traders

Public liability insurance for sole traders generally covers claims for personal injury or property damage caused by your activities as a business, including damage to any work product and legal costs associated with a claim. It also provides protection from claims of slander, libel, or copyright infringement. Depending on your individual policy, it may also cover other losses such as advertising injuries and contractual disputes.

How much does public liability insurance cost for sole traders?

When it comes to cost, every insurer is different so it’s important to compare policies before making a decision. Generally speaking though, most public liability policies start at around $250 per year with some cover up to $10 million in damages.

Choosing a Public Liability Insurance Policy for your Sole Trader Business

When choosing a public liability insurance policy for your sole trader business, consider the following:

1. Coverage: Ensure the policy covers all the risks associated with your business activities.
2. Exclusions: Check for any exclusions that may limit coverage.
3. Premiums: Compare premiums from different insurers to ensure you are getting a competitive price.
4. Limits of liability: Ensure the policy has sufficient limits of liability to protect your business adequately.
5. Claims process: Check the claims process and the insurer’s reputation for handling claims efficiently.

Conclusion

Having public liability insurance can not only be advantageous for potential business prospects but it can also protect your business from unforeseen events such as accidents or injuries that may occur on your business premises. Here are some additional points to consider:

• Public liability insurance can cover legal expenses and compensation costs if someone makes a claim against your business for injury or damage caused by your business activities.
• It can also cover damage caused by your business activities to third-party property such as a client’s property or a supplier’s property.
• Without public liability insurance, your business may be liable to pay compensation and legal fees out of pocket, which can be very expensive and potentially damaging to your business.
• Even if your business is small or operates from home, it’s still important to consider public liability insurance as accidents can happen anywhere and at any time.

Do your due diligence when researching policies and make sure that the cover you choose is adequate for your needs.

The information provided in this article is based on our understanding and research, drawing on the sources listed above. You should always contact a qualified insurance advisor to get professional advice on the most suitable policy for your business.