How Much Insurance Does a Sole Trader Need?
The amount of insurance cover a sole trader needs depends on their trade, the value of the contracts they take on and the risks involved.
Does Public Liability Insurance cover employees?
Quick Answer: Yes, so long as you tell your insurer the number of employees who require cover. Public Liability Insurance covers your employees if they damage a third party's property or injure a member of the public while doing their job for you, but only if you've added them to your policy. Having Public Liability Insurance doesn't automatically protect your whole team. You need to tell your insurer how many employees you have and take out cover for each one..
Key Points
If you have a team, no matter how large or small, here's what you need to know before you take out cover.
Public Liability Insurance covers employees for third-party injury or property damage, but only if you've purchased cover for them.
You must state how many employees you have when you take out your policy. Cover doesn't stretch to your whole team by default.
If you employ anyone, you're legally required to hold Employers' Liability Insurance too. Here at Rhino, we add this automatically once you select more than one employee.
How many employees does my policy cover?
That depends on the size of your business. Think of your policy needing to cover your whole business, not just you. When you come to take out cover, you’ll be asked how many employees you need to cover. If your team grows or shrinks during the course of your cover, you can update the number of employees at any time. Add more people and your premium will likely rise. Cut the number and it'll fall. This applies whether you take on a permanent member of staff or bring in a subcontractor for a single job, so it's worth reviewing your numbers whenever your team changes.
What is Public Liability Insurance?
Public Liability Insurance protects your business if you, or an employee (who’s covered), cause damage to a third party property or cause injury to a member of the public as a result of your work.
Rhino offers cover ranging from £1m to £5m. If you’re looking to secure specific contracts or work for local councils, you’ll likely be required to have at least £2m cover. You can find out more about Public Liability Insurance by reading our Ultimate Guide.
What is Employers Liability Insurance?
Employers' Liability Insurance protects your business if an employee is injured or becomes ill because of their work for you and makes a claim against your business as a result. It covers your legal costs and any compensation you're ordered to pay. Unlike Public Liability Insurance, it's a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969 for any business with employees, including part-time staff, casual workers and labour-only subcontractors. Sole traders working entirely alone don't need it. You can read more in our Ultimate Guide to Employers' Liability Insurance.
What’s the difference between Public Liability Insurance and Employers Liability Insurance, and do I need both?
Public Liability Insurance protects your business if you, or a covered employee, cause damage to third-party property or injure a member of the public. Employers' Liability Insurance protects your business if an employee claims against your business for an illness or injury caused by negligence on your part. Both help offer financial protection for your business, but they protect against different scenarios.
Whether you need both comes down to whether you employ anyone. If you work entirely alone, Public Liability Insurance is usually the priority, since it protects you against claims from clients and members of the public. As soon as you take on anyone else, even a subcontractor for a single day, Employers' Liability Insurance becomes a legal requirement, not an optional extra.
You can take a deep-dive into the differences here.
How can Rhino help?
Here at Rhino, we offer Public Liability Insurance from £5.21 a month, with cover ranging from £1 million to £5 million. Our Employers' Liability Insurance protects you up to £10 million, comfortably above the £5 million minimum required by law.
Having the correct level of cover in place means you're financially protected if the worst happens, for you and everyone who works for you. Whether you're a sole trader taking on your first apprentice or a growing firm with a full crew, the right cover keeps pace with your business as it changes. If you're unsure what cover you need or how many employees to add, give us a call us on 0116 243 7904 and we'll put you right.
FAQ's
Does having more employees to cover cost more?
Yes. Each employee you add increases your premium, since you're extending the cover across more people.
Are there instances where Employers' Liability Insurance isn't a legal requirement?
Yes. If you only employ close family members, you could be exempt from needing Employers' Liability Insurance. You can read more about that here. If you're not sure whether this applies to your business, give us a call on 0116 243 7904.
Do I need cover for subcontractors and temporary workers?
Yes. If anyone works for you, even for a single day, you're required to have cover for them, whether they're a subcontractor, an apprentice or a temp worker. Add them to your policy the same way you would a permanent employee.
