There’s a wide range of insurance policies that can be availed by small business owners. This can provide assurance to their clients and at the same time, it can help business owners sleep soundly knowing that they are covered. Hence, if you are a one-man-band, what type of insurance would be suitable for you?
What is a sole trader?
Sole trader refers to self-employed individuals as well as those businesses who are run by single individuals. Self-employed individuals work on their own. While individuals who run their own business keep all their profits and takes responsibility for their losses.
Most sole trading businesses actually hired some stuff. Consequently, most freelancers would set up their own limited companies.
Why sole traders buy insurance?
When it comes to purchasing the right insurance, there are two kinds of sole traders. The first one purchases insurance because it is required by their clients. On the other hand, the second one purchases a cover because they know the risks that they will be facing. Having insurance in place can give you peace of mind and makes you feel comfortable even if bad things may happen.
Insurance policies are sometimes included in the terms of contracts for freelancers and other professionals. Most large companies would require their contractors to have insurance coverage, specifically professional indemnity insurance, and public liability insurance. Although it is also required by smaller companies and individuals, most especially if you are dealing with sensitive information including personal data or intellectual property.
It is essential to know what type of insurance your client requires as well as the amount of coverage that they want you to have. Likewise, you can also do some research in order to know what sort of insurance is commonly required in your industry or line of work. In this way, you will have some idea about the prices as well as the providers who are offering them.
The other type of sole traders who buy insurance is those who are thinking about the “what ifs.” They keep on thinking about what could possibly happen with their business. Perhaps they heard several stories about companies caught on fire or getting damaged. So, they thought, what if my laptop or other equipment is stolen? Or what if my staff got injured or ill? This type of sole traders wanted to have some peace of mind, that is why they obtain sole trader insurance.
What type of insurance is needed by sole traders?
There are several types of insurance that can provide peace of mind to sole traders. You can either obtain public liability insurance which can cover you in case a member of the public will file a claim against you or professional indemnity insurance which can cover you in case your client will blame you for negligence. Personal accident insurance is also helpful in case you can’t work due to an injury or accident.
What are the things that you need to consider when choosing the right sole trader insurance?
Since there are different types of sole trader insurance policies that are available in the market, sometimes it is hard for you to decide which one suit you the best. That is why there are some important things that you need to consider before choosing the coverage that you want to buy.
Think about the worst thing that could happen
Are you a cynical kind of person? Perhaps the worst things might not happen to you. But what if it will and you don’t have insurance. What if there is fire or burglary in your office? It would be worthwhile to add up the cost of all your equipment and use this amount as the coverage for your insurance. What if you are being sued by a major corporation? Or a member of the public sued you because of the injury that he obtained while being on your premises?
Can your home insurance cover your business equipment or stocks?
It’s wrong for you to assume that your home insurance can cover your business equipment or stocks. What if your laptop was damaged after you spill your coffee on it. Or what if the stocks that you placed in the basement was destroyed by the flood. Most home insurance policies do not cover business properties. You need to check your home insurance policy and get a business insurance policy to cover the essential things that are not covered in your home insurance policy.
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About business banking
A business bank account is essential for any business – whether you are a contractor or a large firm with thousands of employees. There are many business account options with different account features based on your specific needs, including overdraft options, online banking, free business banking and interest on in-credit balances.