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Many tradies start their self-employed life as a sole trader, but as their business grows, switching to a company is not uncommon.

It can make a lot of sense to go this way.  When you go out on your own for the first time, you never know for sure if things are going to work out.

Why spend thousands on setting up a Pty Ltd company, when you can get up and running as a sole trader with an ABN for virtually nothing?

This is what we find is the case with many tradies who become Trade Risk clients for the first time.

But what happens when you switch to a Pty Ltd?  Is your sole trader insurance now useless?

Thankfully not!

In most cases when you switch from a sole trader to a company, you’ll be able to change your existing Trade Risk policy with minimal fuss.

You will need to let us know of course, but the process is generally quite straightforward provided that the following criteria are met:

  • The same person who was the sole trader is now the sole director of the new company
  • The business activities have not changed
  • There are no pending claims or circumstances that you need to notify us of

Even if you don’t meet the above criteria we should still be able to switch your policy, but it will be a little more complex depending on the situation.

The same applies if you are switching from a partnership to a company.

Provided that the same partners are now the directors of the new company, the change to your business insurance should be very straightforward and not require a whole new policy.

Is it more expensive to insure a company compared with a sole trader?

This is a common question, but the answer is generally no when it comes to public liability insurance.

Public liability is priced on a number of factors, such as the trade you are undertaking and the size of the business, either by revenue or staff numbers.

Saving Money

So if your business activities are staying the same and the size of your business isn’t changing, there should be no change to the cost of the insurance.

Keep in mind that there may be a small fee to make the change to the policy, but the actual insurance cost shouldn’t jump up.

Whilst on the subject though, it probably is a good time to review the information that we have about your business.

If your business is undertaking different activities, or has grown in terms of staff or revenue, this would be a great time to check that your insurance is up to scratch.

Again this doesn’t mean that you need a whole new policy, but may mean that your existing policy needs to be updated to meet your current needs.

Anything else to do?

If you’re paying your insurance monthly, you should switch your payment source to come out of the new bank account you’ve set up for your company.

Whilst it has no affect on your insurance, your accountant will appreciate it at tax time!

You’ll also need to ensure your licenses are now in your company name.

This is especially true for Qld electrical contractors, where there are very strict rules stating that the name on the licence must match the name on the insurance.

Next step

Call us on 1800 808 800 and our friendly team will help you out.

If you are looking for advice on anything that doesn’t involve your insurance, you’ll need to speak with your accountant.


Switching from sole trader to company

Tradies Love Trade Risk

In 2017 Trade Risk was awarded a Gold Trusted Service Award for the amazing service we offer to thousands of tradies from around Australia.

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    "To all intents all has gone well, but until I make a claim I really wont know will I?"
    Peter Paul Derkley | Tradesman Insurance |
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    "Excellent & prompt service"
    | Trade Insurance - Renewal |
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    "Been using traderisk for a couple of years now. I highly recommend easy to deal with and provide an amazing customer service!"
    Travis Daniel Finger | Trade Insurance - Renewal |
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    "Easy to deal with. Sent reminder emails and followed up. Gave contact numbers for any issues."
    | Trade Insurance - Renewal |
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    "Communication! Keeping me informed for the renewal process for my public liability."
    Scott Peter Rowlands | Trade Insurance - Renewal |
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    "Trade Risk ask more questions and tailor the cover to suit your risks. That means you get great cover at a competitive price."
    Alister Andrew Campbell | Trade Insurance - Renewal |
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    "Excellent service"
    | Trade Insurance - Renewal |
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    "good service"
    ULTRAFRAME WINDOWS AND DOORS PTY LTD | Tradesman Insurance |
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    "Easy and professional service"
    G.A Turner & T.L Turner | Trade Insurance - Renewal |
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    "Was very helpful nice to talk with Jeremy great service thank you"
    | Trade Insurance - Renewal |
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    "Ease of access and affordable"
    | Tradesman Insurance |
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    "No fuss very easy to deal with"
    Nicholas Oliver Lawson | Trade Insurance - Renewal |
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    "Everything was professional and paperwork sent to was was easy to follow. Jennifer is a great asset to your business."
    | Trade Insurance - Renewal |
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    "Fantastic service with a very competitive rate. Thank you Trade Risk"
    | Trade Insurance - Renewal |
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    "Easy process would recommend Trade Risk"
    | Trade Insurance - Renewal |
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    "Easy to deal with and the process of taking out or renewing a policy is very efficient and intuitive."
    Robert Brian Williams | Trade Insurance - Renewal | Melbourne
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    "Simple Tradie insurance from great people!!"
    Red River & Carol Rohde | Tradesman Insurance |
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    "Very affordable and easy to deal with. Haven’t had to make a claim yet."
    Trevor Wheeler | Trade Insurance - Renewal |
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