Are you wondering which insurance is right for you as a business owner or service provider? Let’s look at the types of insurance for self-employed individuals.
As a self-employed person, it is crucial that you get the right insurance for your business. Besides business protection and continuity, you need to cover yourself and your dependents from liability in case something goes wrong. This article highlights the essential types of insurance for self-employed individuals.
Is insurance necessary for the self-employed?
Yes, it is, because you carry business risks. When considering insurance for the self-employed, you have to think of the business and yourself. Since you are the owner and manager of the business, both categories affect each other significantly. For example, your health determines business continuity, the efficiency of operations, and the overall fate of your team. Similarly, work environment risks could lead to huge costs that will affect you and your family. Therefore, you need to ensure you have the right insurance at all times.
What risks affect the type of insurance you’ll choose?
You’ll need to choose insurance covers based on:
• The nature of your industry
• Your location
• The nature of previous insurance claims, if any
• Your premises
• The presence of and number of employees and the nature of their employment
• Your business assets
• The extent of your interaction with the public
You should consult the right professional service to help you select suitable insurance covers at the right premiums.
Types of insurance for self-employed individuals
Professional liability insurance
This is necessary for anyone offering a professional service or expert advice. As such, most self-employed people fall under this category of work and therefore cannot do without it. The insurance protects you from the financial risks of lawsuits. Should a client find fault with your services and sue, your business wouldn’t otherwise handle the associated costs.
In addition, you need to have this cover as a legal requirement to operate your business. For example, you cannot offer home care services as a nurse without this cover in the UK. Furthermore, clients may wish to see such insurance before engaging with your services.
A major benefit of this insurance is the confidence it gives you to carry out your duties. Having a cover against those huge risks puts you at ease to perform at the highest level, with little worry over the loss in a potential lawsuit.
Business interruption insurance
This type of insurance compensates you for financial losses suffered during a disaster such as a fire or natural causes. The policy covers the projected profits lost for the period before resuming normal operations, and associated costs like taxes, employee wages, relocation expenses, and loan payments.
If you need to use a car for your work, you need to get it insured to cover the business from liability in case of an accident. Third-party vehicle insurance is the critical component of automobile insurance for your business. However, it is wise to get a comprehensive cover for your sake and that of the vehicle. Additionally, you need insurance if you have employees who use their vehicles to perform their duties.
You need to also protect your business premises from a fire, storm, or theft that could destroy the building, furniture, equipment, signage, and stock. Property insurance is a standard cover that doesn’t work for more profound events, like tsunamis and volcanic eruptions. Therefore, if your business is located in such catastrophe-prone areas, you’ll need a more comprehensive cover.
General liability insurance
This insurance covers your business from liability in an accident that caused a person an injury or led to damage to a person’s property. For example, if a customer slipped and fell in your store because of a wet floor, you would be found responsible for such negligence, hence liable to pay compensation. Such scenarios usually lead to huge hospital bills and other costs which could cripple your business.
Most people assume that this insurance only benefits employees. However, your self-employed status gives you access to its benefits. Once you indicate you are the business owner in the insurance paperwork, you’ll access benefits such as medical expenses and lost wages cover.
Insurance is critical to the survival and development of any business, especially in self-employed cases. It covers unexpected and usually significant expenses you otherwise couldn’t afford. This article shows you the important ones to consider when you become self-employed. You can learn more about the right ones by allowing us to help you select the appropriate life insurance, self-employed income protection insurance, key man insurance, and other policies to protect your interests.