What insurance policies do self-employed workers need?

The most common types of self-employed insurance include Public Liability Insurance, which covers injury or property damage to the public, and Professional Indemnity Insurance, which protects against claims of financial loss due to professional mistakes or negligence. Additional cover may be needed based on the nature of work.

Is self employed business insurance legally required?

Most self employed business insurance policies are not legally required. However, Employers' Liability Insurance is a legal requirement if you employ any staff, including part-time or temporary workers.

How does Income Protection Insurance work for sole traders?

Income Protection Insurance provides a regular, tax-free income if you are unable to work due to illness or injury. Sole traders can choose the coverage level and deferred period, offering a financial safety net in the absence of statutory sick pay.

What insurance cover is recommended for sole traders?

Recommended cover depends on your business risks: Public Liability Insurance if you interact with the public, Professional Indemnity Insurance if you provide advice or handle client data, Employers' Liability Insurance if you employ staff, Business Equipment Cover for valuable tools, Income Protection Insurance for illness or injury, and Product Liability Insurance if you manufacture or supply goods.

How do I choose the right level of self employed insurance?

When choosing coverage, consider the indemnity limit. Check if clients or industry bodies specify a minimum level. Higher limits often cost only slightly more but provide greater protection in the event of a large claim.

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A guide to self-employed insurance

If you have made the big decision to start your own business, there are many aspects to consider. One of the most important is self-employed insurance policies, designed to protect you from the risks associated with your business.

The array of insurance options available can seem confusing, but with a little research it is possible to quickly arrange self-employed insurance. Here at BusinessComparison, we help people find the best self-employed insurance policies at the best prices.

What is self-employed business insurance?

Self-employed people often operate as sole traders, although some choose to set up limited liability companies. If you operate your business as a sole trader, legally you will be personally liable for any claims made against your business. This legal structure could put your personal finances at risk, which makes arranging the appropriate insurance extremely important.

Whatever the type of business you operate, insurance provides two main benefits. It provides protection against potential risks and also protects the business legally, if the industry or business type requires insurance. Business insurance will provide the peace of mind, thanks to the financial protection offered.

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Types of self-employed cover

Employers liability insurance

For businesses with employees

Public liability insurance

If a member of the public is injured a result of your business activities, this cover is ideal.

Professional indemnity insurance

If your clients suffer a loss as a result of a service you provide, this insurance will compensate them.

Contents insurance

This is particularly important if your home insurance policy does not cover equipment owned by your business. For example, if your laptop is stolen, this will provide the compensation you need to replace it.

Product liability insurance

If a product you supply, manufacture or design is found to be faulty, this liability insurance will provide compensation.

All policies will provide protection to your business, with some clients often requiring that specific levels of cover are in place. For example, if you are operating as a self-employed freelancer, your client may require a minimum level of public liability or professional indemnity cover. Aside from protecting your business, self-employed insurance may also help you attract clients thanks to your professional impression.

How much does self-employed protection cost?

Self-employed business insurance varies in price between individuals, as each business has its own risk factors and cover requirements. Before purchasing your insurance, you need to decide the type of cover you require and the level of protection. In many cases self-employed people choose to purchase separate policies, whereas others combine several into a single combined insurance policy.

A great tip is to think of the worst-case scenario, then plan your insurance around this. For example, think about potential compensation claims, the cost of replacing your equipment and loss of earning if you suffered an accident. You should also check the level of cover required for any contracts which you are working on. In general, if you operate a large business in a high-risk industry, your premium will be larger than a single home-based worker.

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How to find the best insurance

We have partnered with a selection of the most trusted insurers, to help you arrange insurance at competitive prices. We know that no two businesses need the same insurance, so our team will get to know your specific requirements. Simply complete our quick online form or give the team a call and we will negotiate the best quotes.

Once we have received the quotes you will be able to weigh up your options and purchase the cheapest self-employed cover option. You will be free to concentrate on running your business knowing that you are fully protected, without paying an expensive premium.

To find out more about the range of self-employed insurance policies available or to compare quotes, please contact our team. We will be able to discuss your options and help you find the protection your business requires.

Self-Employed Insurance FAQs

While the right cover depends on your specific work, the most common types of self-employed insurance are:

Public Liability Insurance: Covers you if your work accidentally causes injury to a member of the public or damages their property. Essential if you visit clients or they visit your workspace.
Professional Indemnity Insurance: Protects you if a client claims you caused them financial loss due to a mistake, negligence, or bad advice in your professional service. Essential for consultants, designers, writers, and IT professionals.

No, most forms of self employed business insurance are not legally mandatory, but they are crucial for risk protection.

The exception is Employers' Liability Insurance, which is a legal requirement if you employ any staff, including part-time or temporary workers.

As a sole trader, you are not entitled to sick pay. Income Protection Insurance provides a crucial financial safety net by paying out a regular, tax-free income if you are unable to work due to illness or injury.

You can usually choose the level of coverage and the 'deferred period' (the length of time you wait before payments start).

To determine your needs, ask yourself these key questions:

Do you interact with the public or visit client premises?

Public Liability Insurance

Do you give professional advice, design, or handle client data?

Professional Indemnity Insurance

Do you employ anyone?

Employers' Liability Insurance

Do you rely on expensive equipment?

Business Equipment Cover

What is your income source if you become ill or injured?

Income Protection Insurance

Do you manufacture or supply physical goods?

Product Liability Insurance

When obtaining quotes, consider the level of coverage, also known as the indemnity limit.

A good starting point is to check if your clients or industry body specifies a minimum level of cover. A high limit often costs only slightly more but offers vastly greater protection if a major claim occurs.

Self-Employed Insurance