From Witch Hunts To Cursed Contracts: A Sole Trader’s Spooky Guide To Business Risk

Unfortunately, in the real world, business threats aren’t always so obvious. Instead, they’re silent and difficult to discern, more like a creeping fog. That’s what makes them so dangerous: you don’t see them coming...until suddenly they’re there. Boo!

In this spooooky guide, we unearth the monstrous yet unassuming business threats that go bump in the night. Read on...if you dare.

1. The curse of client claims

You’ve done the work, ticked every box, and believed everything to be done and dusted – and then a customer dispute rises from the grave. Whatever the specifics of the disagreement, these situations can quickly turn sinister – for your finances. That’s why it’s so important for sole traders in particular to have liability insurance, to avoid your nightmares becoming a reality.

2. The phantom of the unpaid invoices

Silence – truly the worst sound that can welcome an invoice. These clients – which looked so real – vanish into the mist, leaving sole traders chasing payments that never materialise. Unpaid invoices aren’t just aggravating, but can be a legitimate drain on your cash flow. To avoid phantom debts piling up into a real-life horror story, try tightening up your payment terms, setting up regular reminders, or getting invoice protection.

3. The trick-or-treat toolkit

Particularly if you work in a trade, your tools are some of your most valuable assets, and it may even be impossible for you to do your job without them. Yet many people assume that their tools will be protected by their home insurance should anything be damaged or stolen, when this isn’t the case most of the time. With specialist cover, avoid any nasty surprises – or, better yet, save them for ‘trick or treat?’

4. Cursed contracts

Do you understand all your insurance policies? Ambiguous wording, vague terms and long-term liabilities can come back to haunt your business. On the surface, these things might seem tedious admin at worst, but the truth is that cursed contracts can leave your finances exposed and vulnerable. So, if your policy’s making you scratch your head, check things out with your insurer before things get truly hair raising. 

5. Zombie projects

As a sole trader, your time, energy and resources are precious – and finite. That’s why it’s vital to make sure every project you take on is doing its bit. Zombie projects are those lingering tasks or initiatives with no cut-off date that offer your business no clear returns – draining your resources yet refusing to die. If a project isn’t serving your goals, it may be time to put it to rest, but this time for good.

Some graves are better unearthed

Insurance isn’t just about reacting when things go wrong; it’s about shining a light on what’s buried, so you can deal with it before things get truly monstrous.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems, we recommend that professional advice be sought