What insurance do I need as a sole trader?
Answer four questions. Do you meet clients or work on their premises (public liability)? Do you give advice or expertise (professional indemnity)? Do you drive for work (business use on your vehicle)? Do you employ anyone (employers liability, legally required)? Then consider tools, home business cover and income protection. This quick selector sits alongside our sole trader insurance guide, which explains each cover in depth.
- Start with the four trigger questions: clients and premises, advice, driving, and employees.
- Public liability suits anyone who meets clients or the public; professional indemnity suits anyone paid for advice or expertise.
- Employers liability is the only business cover that is compulsory, and only once you employ someone.
- Tools, home and income cover are the 'forgotten' policies; see tools, home and income protection.
- If budget is tight, buy what contracts require first, then what would hurt most if it went wrong.
Step 1: Answer Four Questions
2. Are you paid for advice, design, expertise or a deliverable? Yes means professional indemnity.
3. Do you drive between clients or sites? Yes means business use on your car or van (business car insurance).
4. Do you employ anyone, even casually? Yes means employers liability, which is a legal requirement.
Make or sell physical goods? Add product liability.
Step 2: Quick Picks by Type of Work
Consultants, designers, bookkeepers, IT freelancers: professional indemnity first, plus cyber cover if you hold client data (cyber).
Mobile service providers (cleaners, personal trainers, dog walkers, therapists): public liability, often with equipment cover.
Makers and sellers: public and product liability, plus stock cover and market-pitch requirements.
Step 3: Cover the Gaps Sole Traders Forget
Step 4: Order Your Purchases If Money Is Tight
2. Anything a client or venue demands in writing, usually public liability or professional indemnity.
3. The cover for the loss that would end your business, often tools for trades or income protection for people working alone.
4. Everything else as turnover grows.
For the legal baseline behind this order, read do sole traders need insurance.
The Wedding Photographer's Gap
Scenario: Priya, a self-employed wedding photographer, carries £1m public liability only. A camera body and two lenses worth £4,200 are stolen from her car boot, and a couple later claims she failed to deliver the ceremony photographs.
Resolution & Judicial Outcome: Public liability does not respond to either event. The stolen kit needed equipment cover, and the delivery dispute needed professional indemnity. She absorbs the £4,200 loss and pays a settlement herself, then adds both policies at renewal.
What You Should Do: Step-by-Step Action Plan
Critical Mistakes to Avoid
- Buying a single policy and assuming it covers everything.
- Forgetting to declare work done at clients' premises, at home or from a vehicle.
- Skipping income protection because 'it won't happen'.
- Not updating the policy when you hire help or change your trade.