Types of Business Insurance

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Business insurancw

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

There are seven different main types of business insurance. Although it is unlikely you will need them all, you may need more than one.

Here I look at each of the seven different types including what they are and the different circumstances where you may need them.

The Seven Types of Business Insurance

  1. Professional Indemnity
  2. Public Liability
  3. Product Liability
  4. Business Equipment
  5. Business Interruption
  6. Employers Liability
  7. Business Motor

1. Professional Liability

1. Professional Indemnity

Professional indemnity (PI) 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

Self employed individuals who may need Professional Indemnity Insurance include:


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2. Public Liability

Public liability insurance covers you for legal fees and compensation in the event that a member of the 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.

Here’s some examples of how public liability works:

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

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.

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.


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3. Product Liability

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

Who Needs Self Employed Public Liability Insurance

If you make, repair and manufacture any products then 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 insurance cover in the event someone is damaged by a defective candle for example or a fire.

Self employed individuals who should consider taking out product liability insurance include:


Business Insurance Self Employed

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4. 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 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.

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


Business Insurance Self Employed

Axa Insurance

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


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Business Interruption When You’re Self Employed

When you’re self employed not being able to earn, regardless of who’s to blame, 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.

6. Employer’s liability

Employers liability insurance is a legal requirement when you employ people.

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.


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7. 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 drive more miles, in particular during rush hour.  

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