Depending on the type of business you run, you may be required to have public liability insurance. If that’s the case, how much do you need to get? To help you calculate the correct amount, follow this step-by-step guide on how much public liability insurance you need as a sole trader. You can use this same calculation method if your business has more than one owner, but be sure to confirm it with your insurance provider first! Also, this calculation only applies if you’re based in Australia, but you can use these same principles if you run your business in another country as well.
The two types of public liability insurance
There are two types of public liability insurance, which are general and professional. General public liability insurance typically covers you for up to £1 million. Professional public liability insurance would cover your business for more than £1 million.
The three levels of business activity
When you’re starting out as a sole trader, it’s important to understand the different levels of business activity.
There are three levels of business activity: self-employed, limited company and public liability insurance.
The four elements of public liability cover
Public liability insurance protects you against public claims of negligence or wrongdoing. It can cover you in the event that someone is injured, or their property is damaged due to your actions.
The total cost of your policy
A public liability insurance policy protects you from claims of negligence and covers the cost of your legal defense.