Do You Really Need Business Insurance? What Every New Sole Trader Should Know
- Marketing Manager
- Jul 19
- 2 min read
You finally took the leap, now protect what you’ve built
Starting your own business is exciting. You’ve left the 9-to-5, registered your ABN, and maybe even landed your first client. But amidst the invoices and momentum, there’s a question many sole traders forget to ask:
What happens if something goes wrong?
Whether you’re a freelance designer, mobile tradie, online consultant, or run a home-based business, risk doesn't care how small or new you are. And if you’re not covered, you could end up paying for it, literally.
Let’s break down what business insurance actually does, and why it’s worth considering before you’re deep into FY26.
What is business insurance really for?
Business insurance is there to protect your financial future when things don’t go to plan. It's not just for “big” businesses or those with staff, it’s especially important for sole traders because you are the business. That means you’re personally liable if something goes wrong.
It’s about protection, not paranoia.
Some common examples:
A client slips while visiting your home office? That’s a potential public liability claim.
You accidentally breach a contract or miss something critical in your professional work? Hello, professional indemnity risk.
Your tools are stolen from your car overnight? That could mean property or portable equipment cover.
But what if I work from home? Or online?
It’s a fair question. Many sole traders assume that working online or from home means low risk. But even a digital business faces exposure:
You store client data? You could face cyber liability issues.
You give professional advice? That falls under professional indemnity.
You advertise or publish content? Yes, that can lead to claims of defamation or copyright issues.
Real talk: The risks of going uninsured
We’ve seen it before, someone skips insurance to “save money,” then faces:
A $15,000 claim from a client after a job went south.
A laptop crash with no data recovery plan.
A legal letter over a missed detail in their service agreement.
And in most cases? It’s too late by the time they ask, “Do I have insurance for this?”
Here’s the smart move for new sole traders
We’re not here to scare you. But if you’ve worked this hard to build something of your own, it’s worth asking: What’s the cost of protecting it vs. the cost of not?
It only takes 2 minutes to get a quote online and see what’s relevant to your setup.
(No pushy salespeople, just online cover built for sole traders.)
Final word: You don’t need to know everything, but you do need to plan
Insurance isn’t about expecting the worst. It’s about building confidence so you can grow without hesitation. You don’t need to get every policy on Day 1, but knowing what’s available (and affordable) is a smart first step.
If you’re unsure what you need, we re commend speaking with a professional or using an online tool that guides you through your options based on your industry.
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