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Self-Employment 101: Insurance Essentials


If you’re among the 15% of the population who work in a self-employed capacity, business insurance is something you’re most probably familiar with. Whether or not you have an active policy in place, you’ll almost certainly have heard about it and may even have performed some basic research to help you make an informed decision about the type of cover that’s right for you.

The reality is that picking a policy that meets your individual needs is essential for safeguarding the long-term future of your venture. Though it’s not always a legal requirement to have it (this will depend on your specific circumstances), it is still useful regardless.

Want to find out a bit more about the best type of insurance for you? Then, here’s a brief guide to help you out.


What is self-employed business insurance?


Source: Pixabay

Self-employed business insurance is precisely what it says on the tin. Providing protection for your venture, it comes into play in certain instances so that you don’t need to cover unforeseen costs all by yourself. Legal overheads, loss of business equipment, accidents, and more typically fall within its remit, ensuring that you have financial support in place should any mishaps occur.
Why do self-employed workers need business insurance?

Irrespective of whether you’re working for a limited company, a partnership, or as a sole trader, self-employed business insurance provides financial protection for your venture in an array of different scenarios.

These include everything from property damage through to financial compensation for criminal losses, payouts for accidents that occur in the workplace, costs or claims arising from mistakes made on the part of your company, and much more.

This means that no matter what unforeseen obstacles rear their heads, you’ll never find yourself in a position where you cannot meet your financial obligations.


What business insurance cover do you require?


Source: Pixabay

  • This leads to an obvious question: what sort of business insurance policy does your company require? The answer is not a simple one and will be driven by the unique needs of your venture. That said, there are three important types of cover to consider.
  • Public liability insurance: This covers the costs of third-party compensation claims levied against your organisation. A good example would be damage caused to a property you were working on as a builder, and the repair costs resulting from this. 
  • Employers’ liability: If you employ anyone else, you might also want to consider taking out employers’ liability, which covers you against employee injury compensation claims, for example.
  • Professional indemnity insurance: This covers the costs of claims made against your company by third parties should any of your clients find themselves dissatisfied with your work.
The type or types of cover you need will be determined by the specific circumstances of your business.

How to choose the right business insurance policy for your company

There will be lots of different factors that determine the type of cover that best suits you so here are a few for you to think about.
  • Is there a specialist industry-specific cover available for companies like yours? If so, the best thing might be to opt for such a policy. Those working as electricians, for example, may want to choose electrical contractors insurance from a provider with a detailed understanding of the specifics of your business and an ability to tailor their cover to your needs.
  • If you have people working for you, whether on a standard employment basis or as labour-only subcontractors, are they covered too?
  • Does your business require you to have professional indemnity insurance, public/product liability insurance, or both?
  • If any legal expenses arise, will you need assistance to cover these?
  • How much will your monthly payments amount to?
  • What excess will you be required to pay in the event of making a claim?
Be sure to have a specific idea of what you want from your policy to choose the right cover for you.

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