A sole proprietorship is a business that legally has no separate existence from its owner.
Therefore, business insurance is of particular importance for sole proprietors, in order to protect their personal and business interests. Running a business as a sole proprietor is a challenge, and it often involves putting your own finances at risk.
It, therefore, makes sense to manage risk, reduce uncertainty and protect your livelihood through the use of sufficient business insurance. An experienced Insurance Broker in Melbourne can assist you in ensuring that your insurance coverage protects your business against a variety of work-related risks that could result in devastating financial damage.
Insurance keeps your business running
Most sole proprietors simply cannot afford to have time off work.
Without you, there is no business or income. Business owners insurance and some types of property insurance can cover you for business interruption and loss of earning if your business is unable to operate after a theft or other disaster. If covered, your insurer pays you the income your company would have made while it was out of action. This type of insurance has kept many sole proprietorships in business, following unforeseen and damaging circumstances. It is impossible to predict what will happen in life, insurance ensures that your business will stay afloat in the wake of unfortunate events.
Having adequate insurance builds your business credibility and shows your prospective clients and customers that you are the safe bet. Being licensed and insured builds trust, and reassures your clients that if anything goes wrong, you have a way to be able to compensate them.
Protects your most vital asset- YOU!
In order to keep the business running, you need to keep ‘running’. Key person insurance protects you financially in the case of a serious accident or some other unfortunate circumstance that makes you unable to work.
Contracts may require it
If you rent or lease a facility as part of your sole proprietorship, your landlord may require you to have sufficient insurance before agreeing to the lease. Similarly, if you need to borrow money to finance a building or relevant equipment, your loan agreement will likely contain an insurance requirement. Most importantly, however, most client contracts you sign will specify that you carry insurance in the event that things go wrong throughout the provision of your service. Without relevant insurance, most clients will be unlikely to utilize your services.
Insurance protects your personal assets
In a sole proprietorship business structure, it is not only your business assets at risk from lawsuits. Litigation, malpractice and personal injury claims made against your business, leave your personal assets also at risk. Business liability insurance, malpractice insurance or professional liability insurance can cover your personal and business assets if you end up on the losing end of a lawsuit or personal injury claim.
Popular types of business insurance for Sole Proprietorships
Every business, even if home-based, needs to have liability insurance.
This form of insurance protects you from legal action taken against you if someone suffers a loss after following your professional advice, or as a result of your receiving your service.
Covers damage or loss to buildings, contents, and stock.
Property insurance is vital to protect your building, equipment, computers, and inventory. Property insurance can also cover business interruption/loss of earning insurance if your business is unable to operate after a theft or other event.
If you have life insurance, your insurer will pay a certain amount of money to your chosen beneficiaries upon your death. As a sole proprietor, you may be the breadwinner for your family. Having life insurance ensures that your family will be financially secure after you pass.
With proper business insurance, sole proprietors can achieve peace of mind and focus their attention on what they do best — operating a profitable and rewarding business. Speaking with an experienced Insurance Broker can ensure that you receive the best insurance package available for your unique needs.