Do I Need Business Insurance As a Sole Trader?

You might be thinking that you don’t need business insurance as a sole trader. But that’s not entirely true. Sole traders do need insurance to protect themselves from liabilities and damages that can arise from their work. Public liability insurance protects business owners against claims from third parties claiming that their work caused their physical or financial injury or damage to their property. Public liability insurance pays for legal fees and damages if you are found to be negligent or have committed a mistake or a disaster. But how do you know which policy is right for you?

The answer to the question of do I need business insurance as a sole trader depends on the type of business you have. If you are a one-person shop, you may need a business owners policy or a worker’s compensation policy. If you have a physical store, you may also need a professional liability insurance policy. In some states, worker’s compensation insurance is required for all businesses.

While a sole trader may not need business insurance, it’s a good idea for all businesses. Even if you’re a one-person shop, you can still incur liability for your work. Moreover, if your product causes damage to a third party, they can sue you for that. With insurance, you’ll be protected in such a case. There’s no better way to protect yourself from liability than to get the proper coverage for your business.

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