Insurance for Sole Traders

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Why Do Sole Traders Need To Consider Insurance?

Being your own boss and running your own business is exciting. It gives you the freedom to do what you love for a living and flexibility (just to name some of the perks). On the flip side, there’s also the added responsibility of what to do when things don’t go to plan and a claim against your business potentially occurs.

This is where having the appropriate types of business insurances in place can help not only save your back pocket, but your reputation for the long run. Different sole trader businesses will have different needs, so take time to access the type of risks you may be exposed to and the types of policies that are available.

Did you know?

Portable Equipment insurance* is designed to protect your tools of trade anywhere in New Zealand? From Auckland to Invercargill, you can have peace of mind knowing that your valuable tools are protected.

What Insurances Do Sole Traders Need?

Professional Indemnity insurance*

Professional Indemnity (PI) insurance is something that sole traders may need to consider when looking at important forms of protection or their business, especially if you provide specialist services or professional advice. It is intended to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice.

Professional Indemnity Insurance will also assist with the legal costs associated with responding to or managing claims which are covered by the policy.

Professional Indemnity insurance covers acts of professional wrongdoing, such as:

  • Providing misleading or negligent advice
  • Breach of duty (confidentiality and other privacy issues)
  • Defamation, libel or slander
  • Loss or damage to documents

Infringement to intellectual property (including copyright infringement)

Bodily injury or illness caused by the professional services covered under the policy

Your policy may help you cover the costs of defending yourself in court, such as attorney’s fees, court attendance costs, and other legal expenses. It may also cover costs that arise from investigations into the claim and public relations for your business.

A Professional Indemnity policy typically does not cover the following:

  • Intentional damage
  • Acts of fraud and dishonesty
  • Accidental injury and property damage
  • Any claims or circumstances that are known prior to the period of insurance

Public Liability insurance*

Public Liability insurance is designed to provide protection for you and your sole trader business in the event a customer, supplier or a member of the public is injured (and not covered by the Accident Compensation Commission (ACC)) or sustains property damage as a result of your negligent business activities.

As a sole trader, depending on the type of business you are running, you may need to meet your client’s at your office, at their business premises, out on worksites, or other third-party locations. Public Liability insurance covers you for injury and property damage claims that happen wherever you are working.

Public Liability insurance typically covers the following:

  • Personal injury suffered by a third party (e.g., a client, customer, supplier, or member of the public)
  • Damage to third-party property caused by your negligent business activities
  • Legal and defence costs resulting from a covered claim

A Public Liability policy typically does not cover the following:

  • Personal injuries to you or your employees
  • Damage to your own property
  • Advertising Injury
  • Costs of fixing faulty workmanship
  • * Professional negligence or illegal activity
  • Reckless or wilful failure to take care
  • Contractual liability
  • Asbestos
  • Pollution
  • Events occurring before or after the policy period

Protect your business today.

Business Insurance* 

Business Insurance is an insurance package designed to provide cover for your business contents, stock, tools and commercial premises when an insured event occurs (such as fire, storm, theft or even accidental damage). A Business Insurance policy can also cover your portable equipment and loss of revenue due to business interruption in specified circumstances. 

 A Business Insurance package can be tailored to protect you from multiple risks. It can include coverage for the risks that may impact your sole trader business.  

These are some examples of when a sole trader business may require Business Insurance: 

  • If you run a business from home, you may want to look at protecting your business stock with Contents insurance*. 
  • If you use tools of trade while out and about assisting your clients, then Portable Equipment insurance* may be something worth considering 
  • Protect your business’ bricks and mortar with Building insurance* 

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2023 BizCover Limited.

Need Help?

Visit our Contact Us page, where you can find out how to get in touch with one of our business insurance professionals. 

You can also access quick links to our self-service portal, where you can download your Certificate of Currency, update your payment details, amend your cover and download your policy documents. 


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