Self-employed insurance

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    Chris Godfrey

    Page written by Chris Godfrey. Last reviewed on May 26, 2024. Next review due April 6, 2025.

    There are more than 4 million self-employed people in the UK, and they do everything from plumbing, gardening, bricklaying and roofing, to writing, acting, baking cakes, making candles, or restoring classic cars. But just because they’re a one-man band, it doesn’t mean these individuals are immune to risk. If something goes wrong with the work they do, or they things they sell, they could still be on the hook for huge financial claims. 

    Fortunately, self-employed public liability insurance is here to reduce the risks of working for yourself.  Get it and forget it. Keep doing what you love to do without worrying if the worst should ever happen.

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      What is Self-employed Insurance?

      Self-employed workers include contractors, freelancers, gig workers and sole traders. Self-employed insurance covers these professionals from financial loss if something goes wrong with the work they do or the things they sell. Typically, this would mean causing personal injury or property damage to customers or members of the general public, but it can also include providing faulty products, giving bad advice to clients that leads to financial loss, or making false statements that harm someone’s reputation. The self-employed can also secure insurance that protects them if their business equipment or tools are damaged, lost or stolen, or if events beyond their control – such as severe weather – stop them from working. 

      Do I need public liability insurance if I'm self-employed?

      Public liability insurance protects you if someone is injured, or their property is damaged because of the services that you provide. This type of cover, also known as PL or liability insurance, is designed to protect you against claims for injuries or property damage from a customer, client, passer-by, or a visitor to your business premises – whether you’re at fault or not.

      If your work brings you into contact with the general public – for example, you’re a carpenter, plumber, or market trader – or if you have customers visiting your business premises, then you need public liability cover. It’s not a legal requirement to have PL, but if your work causes personal injury or damages the property of others, you could be liable for compensation claims that run into the tens or hundreds of thousands of pounds. Can you afford that type of risk?

      Why do I need insurance if I'm self-employed?

      As a self-employed professional, you are particularly exposed to negative events. There’s no big company behind you to absorb the financial impact. This means you should protect yourself from the typical issues that affect the self-employed, as well as the risks most common to the industry you work in. Additionally, your professional guild or trade body may demand that you take out some types of cover – such as public liability or professional indemnity insurance – and you may find some clients or customers won’t do business with you unless you have certain insurances in place. 

      What type of insurance do I need?

      The business insurance you need depends on what industry you work in, the services you provide, the goods you sell, where you work and who your customers are. Common self-employed insurance products include: 

      Public liability insurance

      As discussed above, public liability insurance protects you if someone is injured, or their property is damaged because of the services you provide – whether you’re at fault or not.

      Tools, stock and business equipment insurance

      Tools Insurance or business equipment insurance, protects the self-employed from the cost of replacing business tools and equipment if they’re lost, damaged, or stolen. 

      Items that are typically covered include:

      • Office equipment and contents (chairs, desk, copiers, computers, mobile phones)
      • Handheld tools (hammers, screwdrivers, saws, pliers)
      • Power tools (drills, sanders, angle grinders, nail guns)
      • Plant equipment (excavators, rollers, diggers, dump trucks)
      • Owned, loaned, leased or hire-purchased/leased tools

      Stock insurance covers the cost of replacing any materials and finished goods you held in inventory but had not used or sold yet should they be stolen or lost to fire or flood.

      Professional indemnity insurance

      Professional indemnity insurance, also known as professional liability insurance, is an essential type of cover for self-employed professionals who advise clients, help them navigate complex financial or legal affairs, or provide them with vital information that is published in the media. In these kind of cases, errors can cost thousands or even millions in legal compensation claims. Professional indemnity (PI) can protect you if a client makes a financial loss because of your work and then makes claim against you. Trade associations, government bodies, public institutions, and major customers will often require proof of a minimum level of PI insurance before doing business with you.

      How much self-employed insurance will I need?

      The level of self-employed insurance cover you need will depend on the work you do, or the products you supply, and your risk profile. For example, a financial adviser may work on deals worth millions of pounds, meaning mistakes could be very expensive. They may wish to take out a higher level of professional indemnity cover than say, a freelance copywriter who creates online content for advertisers. In the same vein, a builder has a higher risk of causing personal injury or property damage to members of the public than an accountant, so they should beef up their public liability protection. 

      Ultimately, because few self-employed businesses are the same, the best way to secure the right type of insurance at the right level of cover is to talk to an expert insurance adviser or broker. Get a tailored package that gives you exactly what you need.

      What other types of insurance do self-employed people need?

      As well as the policies discussed above, self-employed professionals might wish to also consider these other types of cover:

      Product liability insurance – ideal for self-employed who manufacture, repair or refurbish components, parts, or finished goods. Covers you in the event that a faulty product you supply causes personal injury or property damage to your customers.

      Cyber insurance – protects the self-employed from financial loss created by data breaches and cyber-attacks. It covers legal claims, compensation costs, and fines under the GDPR (where legally insurable). In some cases, it can also provide a fast response plan including legal, IT, PR and customer service support.

      Personal accident insurance – covers anyone named on the policy for accidental injury or death at or outside of work. This typically includes loss of income, medical costs and hospitalisation benefits.

      Business contents insurance covers the self-employed for the loss, damage, and theft of the contents of their business premises, including office equipment, stock and inventory.

      Legal expenses insurance – covers the legal costs of litigation, arbitration, and expert legal advice connected to the work you do or the things you sell. 

      Business interruption insurance – covers the self-employed for loss of income if they are unable to work due to events beyond their control – such as severe weather or power cuts. 

      Van and truck insurance – it’s a crime to drive a vehicle on UK roads without insurance. That includes business vehicles such as vans and trucks. Insure your vehicle and its contents from accident, fire and theft. 

      How much is public liability insurance for the self-employed? 

      Public liability insurance for the self-employed can cost as little as £4 per month, but your premium will depend on the services or products you provide, the industry you work in, your risk profile and the excess you agree to pay. 

      How Swoop can help

      All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Contact Swoop today to compare top-quality self-employed cover from different providers and to discuss all your business insurance needs. 

      Written by

      Chris Godfrey

      Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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