Self-Employed Insurance: What Cover do You Need?
More workers are discovering the joys of working for themselves, moving on from traditional workplaces to become self-employed or start their own small businesses.
Whether you’re self-employed and work alone, or self-employed and employ a small team, it’s down to you to ensure you have adequate insurance cover.
Business Insurance – the Basics It can be confusing to know where to start when it comes to thinking about insurance, so we’ve highlighted the most common types of insurance cover bought by the self-employed to help you make an informed choice.
Office Contents Insurance Provides cover for your office contents and workplace equipment to make sure you’re not out of pocket in the event of a loss, such as theft, fire or water damage.
Professional Indemnity Insurance An important cover for freelancers and the self-employed who give advice or provide a professional service to clients, professional indemnity insurance can pay for compensation claims and legal fees that may happen if a client suffers a financial or professional loss due to negligence in your work. For example, if you’re a web designer and a client is sued by image owners for using unlicensed pictures on the website you designed, the client could make a claim against you. Your insurance would pay out to cover these costs.
Public Liability Insurance Provides cover against claims made by members of the public who have suffered an injury or damage (including to their property) in connection with your business. For example, if you have clients at your office, it is important to ensure you have insurance protection in place should they trip over a piece of your equipment, injure themselves and make a claim against you. This can also apply if you visit them on their premises and, as an example, accidentally damage some of their property.
Employers’ Liability Insurance If you have employees, contractors, casual workers or temporary staff, you are usually required by law to take out employers’ liability cover to deal with any claims from employees who’ve been injured or become seriously ill as a result of working for you.
Cyber Insurance For freelancers and the self-employed who regularly travel with portable laptops and smart phones holding data about their clients, the risk of that data being stolen has increased. At the same time, cyber criminals are becoming more aware of the value of this data and are looking for easy targets. Cyber insurance protects you if you lose data, even if you were negligent, or are subject of an attack by a hacker that affects your computer systems. It also covers the response costs, such as notifying everyone whose data has been lost.
Directors’ and Officers’ Liability Insurance If you are a director of your business, directors’ and officers’ liability insurance covers the cost of compensation claims made against directors or key managers by shareholders, investors, employees, regulators or third parties.
Legal Protection Cover Legal protection insurance covers you against the cost of taking legal action in situations such as a commercial dispute and a client or employee takes you to court.
Spotlight on: Professional Indemnity Insurance Experienced and new freelancers alike want to provide excellent service and advice to clients. But what if one of your clients thinks your advice or work has resulted in financial or reputational damage and asks to be compensated? That’s where professional indemnity cover comes in…
What is Professional Indemnity Insurance? Professional indemnity insurance covers individuals or organisations providing professional services to clients against things going wrong, which can lead to expense either for the client or the provider. This could include claims resulting from breaches of professional duty, negligence, or just human error. Protecting your finances with professional indemnity insurance means you would be able to continue business as usual in the event a case is made against you.
Do I Need it? Unlike some industries, professional indemnity insurance is not mandatory for the self-employed or freelance workforce, but for some it’s considered essential business insurance. If you are providing advice or work where financial or reputational damage could happen, then you could benefit from the cover. If a business acts on your advice or uses your work and it results in damage to its finances or reputation, they could take action against you. Without insurance you may have to pay legal costs and damages out of your own pocket.
How do I Choose the Right Policy? Unlike home, car and travel insurance policies, which usually have a standard upper limit (the maximum amount your insurer will pay out in the event of a claim), professional indemnity policies often have a choice of limits depending on your industry and your clients’ needs. Your relevant industry bodies may make a recommendation on which one you should choose.
For further information on the issues covered by this article, please contact Aon on 0333 920 7179 or click here to complete an online contact form This article has been compiled using information available up to 14/09/22. Whilst care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in this document.