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If you’re self-employed, it’s more than likely that you need at least some form of work-related insurance. Obv...
If you’re self-employed, it’s more than likely that you need at least some form of work-related insurance.
Obviously, exactly which insurances you need will vary hugely depending on your business sector and the country(ies) in which you operate. In this article, we list a number of different types of business insurance you may wish to take out or that may, in fact, be mandatory.
Before we start, we must emphasize that this article is intended as a starting point for considering insurance when you are self-employed. We advise that you take local legal advice to ascertain exactly what insurances are essential for your professional and geographical location.
This is arguably the most important insurance and the one that most self-employed people will need. It essentially covers you if anyone is affected or hurt by the actions of you or your employees in the course of conducting your business.
If you employ staff, you also probably need some form of employer’s liability insurance to protect you if an employee makes a claim against you.
Some insurance companies will offer liability insurance as part of an overall “business insurance” package.
Whether this insurance is called professional indemnity or “E&O” tends to vary between countries, but ultimately it’s there to protect you if you make a mistake in the course of your work.
This kind of insurance is essential in all kinds of professions, from medicine to IT consultancy.
If your business carries stock or owns valuable equipment, you will want to insure it against loss or damage.
A “key man” insurance policy is something you really should consider if you operate a one-man business. The policy will cover you for a set level of income if you become indisposed and unable to complete your work.
As self-employment rarely comes with sick pay, this is a really sensible policy to take out if you have a family depending on your income.
What kind of health insurance you need will depend hugely on the country you live in. In most European countries, there is enough of a social safety net that private health insurance may reasonably be considered a luxury.
However, even if you are covered by the state, think through the practicalities: If you experience debilitating ill health, will your business weather a period during which you are waiting to reach the top of a waiting list? If not, you may still wish to consider private coverage.
If you use motor vehicles in the course of your work, you must make sure they are suitably insured. Sometimes this is merely a case of adding “business use” onto your policy, but make sure you check the terms in details. For example, is equipment or stock in transit covered by your policy?
If you’re self-employed, you need to ensure that you have something in place to protect your family should the worst happen.
The above seven types of insurance are by no means an exhaustive list, but should give you a good place to start when considering what insurance you need as a self-employed worker.