Sole trader insurance in Ireland: what you actually need

Who actually asks you for it

Clients, landlords, venues, main contractors and public bodies. Contracts routinely require cover at a stated limit before work begins, and tenders often treat it as a qualification requirement.

The timing is awkward. The request tends to arrive after you have won the work, with a start date already agreed, which is a poor moment to be reading policy wordings for the first time.

What the law asks of you

Less than you would expect, and that cuts both ways. Citizens Information states the position plainly: you are not legally obliged to be insured when you are carrying on a business. It then recommends cover for a list of situations anyway, and one of its examples is that if the public can get into your premises you should hold public liability insurance.

So no Irish law obliges you to hold it. No Irish law caps what a client or a member of the public can claim from you either, and as a sole trader that claim reaches your own assets, because there is no company standing in between.

The one exception is driving. Motor insurance is compulsory to drive in a public place, and a private policy may exclude driving in the course of business, so check the wording if you make deliveries or visit clients.

The three covers, and what each one answers

Public liability answers injury to people and damage to property. A customer trips over the cable running to your card reader. You put a drill through a client's water pipe. You knock a laptop off a desk during a site visit. The trigger is an accident during your work.

Professional indemnity answers purely financial loss: nobody is hurt, nothing is broken, and your client is out of pocket because of your advice or your work. A costing error they build a budget around. A specification that missed what was needed. A detail you should have flagged and did not.

Employers' liability answers injury or illness to your own staff. It becomes relevant the moment you hire anyone, including casual and part-time help.

Most sole traders carry exposure to one or two of these. Some carry all three.

Working out which applies to you

Ask what a client could plausibly lose because of you.

If your work is physical, or brings you near people, premises or their belongings, public liability is the base cover. Trades, retail, food, hospitality, hair and beauty, fitness, delivery and anyone working on client sites sit here.

If clients pay you for advice, expertise or a deliverable they rely on, professional indemnity carries the bigger exposure. Consultants, information technology and software, marketing and design, coaching and training, bookkeeping, translation, interior design and human resources sit here.

If you do both, you carry both exposures, and they are not alternatives. An information technology contractor can damage equipment on a client site and separately cause an expensive outage through a configuration error. An interior designer can knock over a client's artwork and separately specify a material that has to be ripped out and replaced.

What you choose, and what it changes

Two settings do most of the work on both price and usefulness.

Your cover limit is the maximum paid out, and each cover has a per-claim limit and a yearly limit. Public liability goes up to €6.5 million per claim and professional indemnity up to €1.25 million, depending on your profession. If a contract sets a minimum, check it against your quote before you sign.

Your excess is the part of each claim you pay yourself. It can start from €0, and a higher excess lowers your monthly premium.

Beyond those, price is driven by your profession and declared activities, your annual revenue, and the cover you select. With Insify, Public liability starts at €7.55 per month and professional indemnity at €10.80 per month.

Insurance self-employed people and sole traders for sole traders in Ireland

Insify offers business insurance for self-employed people and sole traders in Ireland:

• Public liability insurance is for claims that your work injured someone or damaged their property, starting at €7.55 per month including taxes, with employers' liability available as an optional addition once you have staff.

• Professional indemnity insurance is for claims that your advice or your service cost a client money.

Insify is an insurance intermediary, not the insurer. Cover is underwritten by our insurance partner, named in your policy documents. This article is general information about business insurance in Ireland and is not tax, legal or financial advice. Cover, limits, conditions and exclusions described here are indicative and non-contractual; only the terms of your policy apply, and you should read your policy documentation before taking out cover.