What Business Insurance Does A Self-Employed Person Need?

insurance for self-employed

As a self-employed person, it’s important to protect yourself and your business against unexpected (and unwanted) risks. While business insurance for self-employed may seem like an additional expense, it’s a crucial investment that can save you from significant financial losses in the long run. In this article, we’ll explore the types of business insurance that a self-employed person in the UK needs to consider while operating their business.

At Joanna Bookkeeping, we understand that as a self-employed business owner, it can be difficult to find someone who really understands your business, including your insurance needs. That’s why we offer savvy solutions tailored to suit self-employed people and their businesses. Our professional accounting practice, based in Oxford can help with the ins and outs of bookkeeping and accounting, and help you have a deeper understanding of your responsibilities as a self-employed business owner.

And if you’re wondering how you can compare and get insurance for yourself, check out Policy Bee. They are an insurance broker specialising in insurance for small businesses, including self-employed. (A little disclosure: if you click on the Policy Bee link on this website, find something you like and buy it, we may make some cash. Don’t worry, you won’t pay any extra – sometimes you might even get a tasty discount or a nice reward by using our link. It’s a win for us and a win for you too! And if you become their client, you may have the same opportunity to earn something extra.)

Do you need insurance if you're self-Employed?

As a self-employed person, you are responsible for your business, its finances, and any liabilities that present themselves. Without the right insurance for self-employed in place, you run the risk of losing everything you’ve worked for in the event of a lawsuit, accident, or natural disaster. Additionally, some clients and customers may require you to have certain types of insurance before even considering doing business with you.

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Types of business insurance for self-Employed people

Public liability insurance – This type of insurance for self-employed protects your business against claims made by third parties for bodily injury or property damage caused by your business activities. For example, if a customer slips and falls in your office, public liability insurance would cover the legal costs and compensation awarded to the injured party.

Professional indemnity insurance – Professional indemnity insurance protects you against claims made by clients for errors or omissions in your work. This type of insurance for self-employed is particularly important for those offering professional or legal advice (such as an accountant or consultant) because it can help cover the cost of defending yourself against accusations of professional negligence, breach of duty, or breach of contract, etc.

Employers’ liability insurance – If you employ anyone, including casual workers, you must legally have employers’ liability insurance. This type of insurance covers your business against claims made by employees for work-related illnesses or injuries. The minimum cover required by law is £5 million, and failure to have employers’ liability insurance can result in a fine of up to £2,500 per day.

Product liability insurance – This insurance for self-employed protects your business against claims made by third parties for injury or damage caused by products that you sell or supply. As a self-employed person, you may not think that this type of insurance is relevant to you, but it’s important to remember that you can be held liable for any defects or faults in products that you supply to customers and may cause harm to them.

For example, let’s say a customer buys a candle that your business manufactures, and a defect in the product end up injuring the customer, and they sue your business. Your policy will help cover the customer’s medical costs or legal costs.

Business interruption insurance – Business interruption insurance provides financial protection in the event that your business is unable to operate due to an unforeseen event such as a fire, flood, or another natural disaster. This type of insurance for self-employed can cover loss of income, rent, and other expenses that you would typically incur while your business is closed.

Cyber liability insurance – This type of insurance is particularly important in the digital age and covers your business against losses or damages resulting from cyber-attacks or data breaches. As a self-employed person, you may be at risk of cyber-attacks, particularly if you store sensitive client information on your computer systems. Cyber liability insurance can cover the cost of investigating and managing a data breach, as well as any resulting legal costs.

Legal expenses insurance – Providing financial protection in the event that your business becomes involved in a legal dispute. This type of insurance can cover the cost of legal representation, court fees, and any compensation or damages awarded against you.

It’s very important to note that different insurance plans will cover different aspects of a business. Always contact your insurance provider to discuss your specific needs and to find the right insurance coverage for your business and industry. Don’t have any insurance yet? Check out Policy Bee.

By following our advice, you can ensure that you have the proper business insurance coverage as a self-employed person, providing you with peace of mind and protection for your business.

Joanna Bookkeeping is a professional accounting practice based in Oxford, UK. Our mission is to support self-employed people maximise their potential via effective accounting and bookkeeping services. And, because we’re fully digital, we offer services to businesses all over the UK!

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