Should I get insurance for my sole trader business?
AI'm going to operate my business as an arborist as a sole trader. I don't have much work at the moment and I'm trying to keep business costs to a minimum. It's not a particularly risky business in my opinion and I do all the work myself. Why would I bother getting insurance?
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Answer by LegalEagle™ staff, Melbourne 3000 VIC
- Whether you obtain insurance or not really depends on your own individual appetite for risk and any compulsory insurances required for your particular industry.
- Arguably operating as an arborist carries a medium to high degree of risk. For example a falling tree may crush a
- house;
- car;
- other structure; or
- even injure a person.
- If this were to happen you would be personally liable to pay for any damage or injury that resulted.
- Depending on your financial situation it might be unlikely that you will have sufficient funds to cover this amount. This may mean you have to close your business or enter bankruptcy proceedings. You may even be sued.
- For your own personal protection as the sole worker in your business you should consider how you would survive if something were to happen to you such as being injured at work. As you are not technically an employee you will not be covered by WorkCover in the event of an accident.
- Usually it will be advisable to obtain insurance for you and your business that will adequately cover the kinds of accidents which may occur in your business as an arborist including any:
- potential liability to the public;
- your own health; or
- your own income in the event you cannot continue to work.