Types of Business Insurance When You’re Self Employed

Business insurance self employed

What is Self Employed Business Insurance

When you’re self employed insurance offers you protection and peace of mind.

Here I look at the different types of self employed insurance, help you decide what you need & show you where to get online quotes.

Self Employed Business Insurance

Types of Business Insurance When You’re Self Employed

Insurance protects you against risks. For example the risk of theft, getting sick or accident.

When you take out an insurance policy the insurer calculates the likelihood of a risk happening and uses that to determine how much you pay.

When you’re self employed it’s your responsibility to:

  • Work out if you need insurance
  • Pay for insurance yourself
  • Make sure the insurance policy is right for you and your business

One insurance policy covers you against one particular risk.  Therefore you may need to take out more than one type of business insurance. But these will be included in a single insurance policy if you choose a provider.

Here are some of the most common types of Self Employed Business Insurance:

Professional Indemnity (‘PI’)

Professional indemnity (PI) business insurance is mainly for service based industries.  It covers the legal costs and expenses incurred if you’re found to provide incorrect or inadequate advice which causes your client financial loss.


Who Needs Self Employed Professional Indemnity Insurance

Typical self employed individuals who may need Professional Indemnity Insurance include:

Public Liability

Public liability insurance covers you in the event that a member of public is injured or their goods are damaged as a result of coming into contact with your business or member of your team. This can be at your business premises or on site.

Self employed public liability insurance covers you for the legal fees and compensation involved in the event of someone making a claim.

Here’s some examples of how public liability works:

A self employed beautician visits a customers house and spill wax on their customers carpet.  The beautician would be able to claim on their public liability insurance for the damage.

A client visits a self employed bookkeepers office and the bookkeeper spills coffee on their laptop.  The cost of the claim for the laptop would be covered by the bookkeepers public liability insurance.


Who Needs Self Employed Public Liability Insurance

Many self employed individuals choose to take out public liability insurance, especially if they have clients visiting their premises or they go to theirs.

Typical self employed individuals who choose to take out Public Liability Insurance include:

Public Liability for Home Based Businesses

If you’re self employed and have a home based business then public liability insurance will offer cover in the event of a claim by customers or clients visiting your home.

Someone may trip or fall over in your house resulting them in being unable to work for a period of time. Public liability would be cover the cost of the claim for compensation and any legal fees.

Product Liability

Products liability is important if you have a business that supplies goods and products. It is is insurance cover in the event that someone is injured or their property is damaged by something you have sold them.

Products liability insurance covers the cost of legal fees and compensation due in the event someone makes a claim.

Who Needs Self Employed Public Liability Insurance

If you make, repair and manufacture any products then you should consider taking out public liability insurance.  You should consider taking out public liability insurance even if you have safety tested your products.

Say you are a self employed candle maker selling on Etsy then it is advisable to take out public liability.  It is cover in the event someone is damaged by a defective candle for example or a fire.


Typical self employed individuals who should consider taking out product liability insurance are:

Business Equipment Insurance or Portable Equipment Insurance

Business equipment insurance covers the cost of replacing equipment which has been lost, stolen or damaged.

When you’re self employed it is your responsibility to have your own equipment – some of which may be quite expensive and business critical. Business equipment insurance or portable equipment insurance is a way to protect yourself against unexpected loss or damage for things like:

  • Mobile phone
  • Laptop
  • Tablets & ipads
  • Tools
  • Camera equipment
Who Needs Self Employed Business Equipment Insurance or Portable Equipment Insurance

Many self employed individuals choose to take out public liability insurance, especially if they have clients visiting their premises or they go to theirs.

Typical self employed individuals who choose to take out Business Equipment Insurance include:

Business Interruption Insurance

Business interruption is financial cover if you are unable to trade to compensate you for loss of income or profits if a major event or natural disaster happens. This includes things like:

  • Fire
  • Explosion
  • Earthquake
  • Theft
  • Vandalism

Some business interruption policies even offer cover for increased trading costs, if you find a way to continue to run your business despite the event.

Business interruption insurance covers financial losses. Separate insurance policies to cover things like premises and equipment will still be required.


Business Interruption When You’re Self Employed

When you’re self employed not being able to earn, regardless of who’s to blames, can have a major impact on your life.  

Business interruption insurance can offer you protection and peace of mind that you can continue to pay your personal bills while you get your business back on its feet.

Employer’s liability

Employers liability insurance is only necessary when you employ people and this insurance is a legal requirement.

It is cover for your business in the event that your employee(s) are injured or killed during the course of working for you.

Employers liability only covers people who are on your payroll.  It does not cover injury of sub-contractors, consultants or contractors who invoice you for their services.

Business Motor Insurance

Business motor insurance is different to personal motor insurance and is often overlooked. If you plan to use your car for business purposes then you should let the insurer know and extend your policy for business cover.

Business motor insurance is generally more expensive than personal motor insurance.  This is because insurers consider that a business driver will use their vehicle more and cover more miles in particular during rush hour.  So business drivers are considered higher risk due to the time spent in the car and the times they travel, putting premiums up.


Do you need insurance when you’re self employed

It is not a legal requirement to have insurance for many self employed individuals.  Despite this, many choose to take out insurance regardless to:

  • Protect themselves in the event of a claim
  • Cover the cost of replacing expensive equipment in the event of loss, damage or theft
  • To meet client requirements

How to get insurance quotes when you’re self employed

You can get insurance quotes over the phone or by going online.  The key is to make sure you take out the right insurance for you, so you are correctly covered.

Going online can be done quickly and easily and most insurers offer a full list of trades/professions to choose from.  That way the quote you receive is tailored to exactly what you do. Most insurers will call you before you have to pay for the quote, that way they can check all the details and that the policy is right for you.

Here are four insurers who give online insurance quotes:

Business Insurance Self Employed

Axa Insurance
Best all-rounder for low-cost online quotes
Get your quote now >>


Axa is one of the biggest and most established insurance companies in the world. They specialise in a wide range of insurance so they are ideal for any type of business of any size.  

Axa also offer a 10% discount on all online insurance quotes.

Hiscox UK
Best for tailored online insurance quotes that you can buy instantly
Get Your Quote Now >>

Hiscox offers one of the most powerful online business insurance quotation makers. It’s simple and puts you in complete control.

Hiscox allows you to build a fully bespoke package by letting you:

  • Add a huge variety of insurances to your quote;
  • Use sliders to adjust your own level of cover;
  • Adjust your excess.

Once you have reviewed your quote you’re given the option to buy it there and then, paying either annually or setting up a direct debit.

Policy Bee
Best for competitive online professional indemnity insurance quotes
Get Your Quote Now >>


Policy Bee specialise in professional indemnity insurance for professionals starting at £8/month. So this is the perfect insurer if you are self employed professional in industries like:

Click here to find out more and receive an additional 10% extra off your insurance quote.

Simply Business
Best for specialised self employed business insurance quotes
Get Your Quote Now >>

Simply Business are a purely online insurer specialising in a full range of self employed trades/professions.

They offer competitive rates and their specialism within the self employed world means they are perfectly place to support you through finding the right insurance policy for you.

When you’re self employed, every penny counts.  So if you are starting out ALWAYS:

  • Get more than one insurance quote to check the price you’re being quoted;
  • Be honest on your application so you get the right insurance policy;
  • Do a review every year before you renew to check you are getting the best price.

Head over to the Business Hub for more advice. It’s full of templates and guides to help you manage your finances when you’re self employed. And don’t forget to find me on Facebook.


Accountant In Your Inbox

I'll help you to make more profits, pay less tax and stay on the right side of the rules. Enter your email address to connect with me!

No spam ever. Unsubscribe at any time. Powered by ConvertKit