Nothing beats the freedom of being your own boss. But when you’re self-employed, protecting your livelihood is of paramount importance. With that in mind, what business insurance cover is it advisable to have to make sure your business is properly protected? Let’s take a look.
Professional indemnity insurance
Firstly, you will need professional indemnity insurance. This is there to help you meet the cost of any legal action arising as a result of a client suing you for bad advice, a mistake or any other form of perceived negligence that results in losses to them. Professional indemnity insurance will also help to defend you if a customer were to allege that you have done something wrong and this is not the case. While you’re not legally obliged to have it, you may find that some bigger corporate clients demand it before they’ll work with you. If your business is going to be offering any sort of advice, design or specialist trade – if you’re a freelance consultant, for example – it’s a must.
Public liability insurance
Public liability insurance is essential if you’ll have members of the public coming to your premises, or if you’ll be carrying out work anywhere where you could come into contact with members of the public, including customers or clients. This insurance is there in case anyone is injured, or you cause accidental damage to Third Party Property. Depending on what your business does, you may need specialist insurance that covers the specific activities your business undertakes, such as window cleaning insurance or builders’ insurance.
Office and vehicle insurance
It’s not just liability insurance you need to think about when you’re self-employed. If you work from an office, studio or workshop, you’ll need cover for your premises, and the same goes for any equipment you use. This is in case you’re affected by a fire, flood or burglary. You can even get cover for working from home. If you have a vehicle you use for your business – whether it’s your own car for driving to clients, or a van you use for site visits or deliveries – you’ll need dedicated business vehicle insurance. If you have multiple vehicles, or have a fleet, you can also get dedicated fleet insurance.
Business interruption insurance
Would your business be able to keep going if something unexpected happened or your premises becomes unusable for some reason? Business interruption insurance is there to give you the peace of mind that you can weather the storm, covering costs such as renting an alternative place of work while your primary one is brought back to a usable state.
Setting up as self-employed
If you’ve not yet taken the plunge and become self-employed, you’ll be glad to hear that there are very few formalities to it. To set up as a self-employed sole trader, all you need to do is let HMRC know and make sure you complete a tax return each year; we’ve written more about this here. If you’re planning on setting up a limited company, there’s a little bit more to think about, so follow the steps in this Government advice if this is the route you’d like to take.