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ℹ️ Quick guide on sole trader insurance

What is sole trader insurance?

When you're running a small business, a good sole trader insurance policy is a must because as it helps you stop worrying when you're on the job.

This article is a comprehensive guide to help you answer the most common questions a sole proprietor would ask during the operation of their business. 

By the end, you should be more comfortable with sole proprietor insurance, and you can find a low-cost policy if you need one? 

Each question on this page is clickable.

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Q1: What is sole trader insurance?

So what is sole trader insurance, and why do you as a sole trader need it? It's simple; if you run a business around the public, you need public liability insurance for sole traders. Then if you employ people, you'll need employer liability insurance for sole traders by law.

You can also upgrade your policy when you and if you become a limited company, just by giving your insurer a call. Or you could do it online depending, again on your sole trader insurance company.

You may need sole trader insurance to protect personal assets but are used by your business. In this case, you can cover personal assets with the right company.

If you would like to see what a policy would cost you as a sole trader. You can use the exclusive trader insurance comparison tool to do a great job.

Get a quote on sole traders insurance.

Q2: Do sole traders need insurance?

Do sole traders need insurance?

If you're a one-man-band and you think you can pay for damages to customer property by yourself, you could get away with having no insurance. 

But, is that wise?

No, I think you answered "no" there, and why would you go out there on a job having no protection, anything could happen. So, the answer to your question would be to buy a policy and stay safe because you never know what's around the corner.

Get a policy by comparing the UK's best performing sole trader insurance companies with one quote, get one here.

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Q3: How much does sole trader insurance cost?

How much does sole trader insurance cost?

Business insurance for sole traders is quite cheap compared to car insurance or van insurance. A typical policy could cost you around £15 to £25 per month and sometimes less expensive if you find the right company.

Some companies say they can do a policy for around £5 per month, but that would be without no employee liability or professional indemnity insurance for sole traders. 

It would be a fundamental policy, but one that would be fine for you as a start-up or you want a cheaper price this year.

And the price is always going to be the factor when taking a policy, and the cheapest way to secure an affordable one is to use the right tools for the job.

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Q4: What insurance does a sole trader need?

What insurance does a sole trader need?

Q14. What insurance does a sole trader need?

There are a few products sole traders might need, including these below you.

  • Public liability insurance
  • Employee liability insurance
  • Professional indemnity insurance
  • Sole trader van insurance

A standard policy will include public liability first, then you can add insurance for vehicles, income protection or employee liability insurance. You only need sole trader employee liability when you take on staff.

Use the free comparison tools for cheaper sole trader insurance.

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Q5: Can I get sole trader sickness and accident insurance?

Can I get sole trader sickness and accident insurance?

Insurance companies can accommodate a range of products like income protection insurance and medical insurance for sole traders just like on an individual basis, but a different policy written up around you and your business.

With sole trader sickness and accident insurance, you're covered for protection against illness or injury, resulting in you not making an income. If you have substantial commitments like a mortgage and car payments, this policy could come in hand. 

It would pay you for a specific time until you get back to work.

If you need a policy and want to add illness or injury protection, one of these companies can help you here.

Get a reasonable price with a fast quote.

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Q6: Do I need employers liability insurance if I am a sole trader?

Do I need employers liability insurance if I am a sole trader?

If you employ even one person, you need a policy to cover them from accidents and injury at work. It is actually against the law to not have a policy if you employ people, sole traders or limited companies.

If you, "as the business owner" is sued and taken to court because one of your employees falls off the roof, they could claim your company or you personally.

You could be held accountable with no policy in place.

And as you grow, you can add and remove employee with most insurers through their website instead of calling with because who needs that?

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Q7: Do I need public liability insurance as a sole trader?

Do I need public liability insurance as a sole trader?

If you work with the public, whether you're out there slabbing gardens or carpet cleaning you need to consider a policy carefully. If you think you can get off without public liability insurance as a sole trader, think again, it's not worth it for a few pounds a month.

Think of it as a necessary evil, but it must be in place. You'll be glad you did if you get claimed because a customer tripped over your tool bag or takes a reaction to the chemicals you've been using. 

It could be anything at all, something that was just an accident, the customers always right (usually) if it was beyond no reasonable doubt it was your fault, the court could side with them.

Is the reason you are here today could be to find a decent policy with a reasonable price attached to it?. If we're on the same level. 

Get public liability cover for a sole trader with the help of UK experts.

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Q8: How much does public liability insurance cost for a sole trader?

How much does public liability insurance cost for a sole trader?

The cost will vary from insurer to insurer and if it's just a single public liability policy for sole traders. Don't expect it to be a fortune every month because it is affordable.

Look for the lowest quote you can get because most insurers use underwriters to cover claims, anyway. What we're trying to say is that underwriters don't make up the cost of the policy, the insurer does that.

And 90% of insurers use the same underwriters in the UK. So you can choose a policy with the best price, even if you've never heard of an insurer before. As long as they can legally protect you, your customers, your employees and your products.

Remember to compare quotes every year because that's how you save your business money instead of your current insurer renewing on a automatic schedule.

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Q9: Do I need a separate bank account as a sole trader?

Do I need a separate bank account as a sole trader?

It is best to have separate bank accounts because it keeps everything you buy for your business accountable.  And having to pay your account for extra work every year or three months can be avoided.

It also keeps you right knowing you have funds for fuel, expenses and anything else you would pay out each working day. Another bank account can help you with budgeting, and you can hand over the card to one of your employees, safely.

So having two separate accounts, one for you personally and one just for business is worth it, and most accountants will tell you that too, ask yours?

Do you know it's simple to get a business account these days? If you want another bank account just for your sole trader operation, try the Starling Bank.

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Q10: Do I need employers liability insurance for myself?

Do I need employers liability insurance for myself?

If you're the business owner, a policy could cover you for accidents and injury at work. It could also pay-out if you are not able to return to work for a few months, with Income Protection Insurance for sole traders.

As for employee liability insurance, you only need that cover if you employ and yes, you are an employee if you run a limited company. Your insurer will run you through what you need when you get a quote.

Take the time to compare sole trader insurance companies with this quick and easy form designed for sole trader and small businesses.

Get your quote here sole traders.

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Q11: Do you need insurance if you are self-employed?

Do you need insurance if you are self-employed?

It is better to have it than not have it as most business owners agree. If your business invested in tools, machinery and other costs to get going, then you might want some cover over them?

If it's just you without no employees and you work on a farm, then you could get away from not having insurance. Then again if you work through a company like Amazon and you have your own van for deliveries, then a policy is needed.

  1. Do you work with the public? Yes.
  2. Do you employ people? Yes.
  3. Do you have an ongoing contract? Yes.
  4. Do you have a van or commercial vehicle? Yes.

If you want low cost and good sole trader van insurance, you can follow these links.

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Q12: Do you need an accountant as a sole trader?

Do you need an accountant as a sole trader?

If you can do the books yourself, go ahead and get it done. Otherwise, you can use an account to do it for you for a few hundred per year. If your a taxi driver the typical cost is around £250 to £400 a year if you live in Scotland. 

England works out around the same if you need to use a small business accountant.

If you like working online, you can use a service like XERO. With their online systems, you can manage your business expenses relatively easy once you get your head around it. 

It doesn't take long to work it out.

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Q13: Do I need employers liability insurance if I have no employees?

Do I need employers liability insurance if I have no employees?

No. Why would you?. You don't have any employees. You should be looking for public liability for sole traders at the most. Then you can ask the same insurer to find your van insurance if you need it. 

You may even need professional indemnity insurance for sole traders. Professional indemnity can protect you against financial loss, or personal injury and property damage from your negligent acts on the job.

Your JCB could bring down a building, or you could drop paint on a very expense wooden floor. This cover protects your business against a costly claim made upon you and your business.

And some companies who offer contracts insist on you having professional indemnity insurance, even if you are a sole trader or a Limited company.

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If you want easy sole trader insurance, you can compare quotes with the UK best and rock-solid insurers by clicking here.

Q14: Can I do my own accounts as a sole trader?

Can I do my own accounts as a sole trader?

Yes. If you want to save some money and you know how to work the HMRC online Tax Return tools, you can do it yourself. And by the way, once you get the hang of it, you can save yourself a few quid hiring an accountant.

But remember to get your figures right from day one and keep receipts from anything you buy to show the taxman. You don't want them to contact you regarding your mistake or inaccurate information.

So, yes you can do your own accounts if you keep on top of the numbers.

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Q15: What sources of finance are available to a sole trader?

What sources of finance are available to a sole trader?

Finance must be there for marketing, wages and to keep things running, financially. All businesses work the same, from a small one-man-band to Coca-Cola and Gillette.

Sure, depending on how good your credit rating is on you and how much you want to borrow, there are plenty of choices for sole trader finance. A small, £20,000 business loan can go a long way. The new investment could give you a £20,000 float for the stock, or you could use it for a marketing campaign as long as you can get your £20,000 back and more.

And remember it's better to spread that loan amount over the next few months and not all in the one go. Find somewhere like Yell.com or build your own website with Sitesell.com for free traffic from search engines.

With a company like Sitesell.com, you can talk about your local business, on your own website. It can bring you in a steady source of customers if you work very hard on the content.

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You can learn to do this and get all the tools you need to build your very own website for around £25 per month, and it takes a few months to master. But, if you are serious about your business, building your town website is something you might want to look a Sitesell.com.

Here's the link — all the tools to build your traffic generating website.

Ending this article

Hope you get the benefit from this article by helping you find better sole trader insurance and to understand what you might need to cover you as a sole trader.

If you need a policy, please feel free to use the sole trader insurance comparison tools available to you. It won't cost your business, and it works a treat as it saves time going from website to website.

Find the perfect business insurance for sole traders here!

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Video Guide for Sole Traders


Sole Trader Resources

Here's a list of resources you might find handy when your starting your business and information about running it.

  1. Learn how to set up sole trader business.
  2. 13 things you should know about being a sole trader.
  3. How do I register as a sole trader.

Each link will open up a new window.



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