With digital advancements making it easier than ever for entrepreneurial self-starters to launch and market a business. 15% of the UK population is now self employed – the equivalent of 4.8 million British nationals. A large percentage of which do not have adequate business insurance. It’s a trend that’s been steadily growing since the start of the millennium. With the biggest spike in self-employment among the over 65s, followed closely by 16-24-year-olds, who have grown up in the Internet age. But, while being your own boss might offer more flexibility and freedom than working a typical 9-5 as an employee, self-employment requires a great deal of tenacity and responsibility. Not least of all when it comes to protecting your personal assets and business interests with insurance. Self-employed insurance: safeguarding yourself and your income Despite the highest-levels of self-employment Britain has witnessed in over a decade, it’s estimated that around 50% of those registered self-employed are operating without appropriate insurance cover. While not all business insurance is applicable to freelance contractors, certain policies do exist specifically to protect the interests of self-employed workers. Not to mention, some potential clients and customers will insist on you having the necessary insurance in place before they instruct your services or do business with you. It’s these policy types that we’ll focus on throughout this self-employed insurance guide. Helping you better understand the nature of insurance on the market and the relevancy of each policy type to your individual self-employment circumstances. Professional indemnity insurance for the self-employed Professional indemnity is one of the most important insurance types on the market for self-employed individuals, and while it isn’t a legal requirement to have, it’s highly advised for anyone operating as a freelance consultant or running a business that offers its services to clients. Here are some top tips. Professional indemnity insurance essentially covers the cost of any legal action against your company or the work you’ve produced. If you’re responsible for a mistake that has caused your client financial losses, damaged its infrastructure or ruined its reputation, you could find yourself the subject of a legal claim for compensation. Even if you’ve ceased trading, run-off insurance will help to cover any work that was undertaken in the past. Public Liability insurance for self-employed sole traders Public Liability insurance is essential for any self-employed trader whose business brings them into contact with members of the public. Whether it’s visiting clients on location, carrying out works on site, or running an events-based business with multiple public attendees, any part of your operation that involves the public must be covered by Public Liability Insurance. These types of policies cover you for accidents or injuries sustained by a member of the public as a direct result of you or your organization. So, even if you run supper clubs from your home or Airbnb your spare room for extra income, you still need to ensure you have adequate Public Liability protection in place to protect you against claims that may arise from those that enter your home for commercial purposes. Business Vehicle insurance if you’re registered as self-employed If you operate a business vehicle or even use your own car for business use, such as making deliveries or accepting paying passengers, you need to ensure your vehicle is covered under a Business Vehicle insurance policy. Even if your car is already insured, it’s unlikely the policy extends from private to business use. So, to avoid being uninsured for business journeys you make, be sure to talk to your insurer about any business-related travel you use your vehicle for. This way, if the worse does happen and you need to make a claim while using your car for business purposes, you’ll be protected. On the other hand, if you operate multiple vehicles within your self-employed business model, you may need to look into a dedicated Fleet Vehicle insurance to cover your activities. Self-employed Business Interruption insurance If your business operates out of dedicated premises, it can be a good idea to take out Business Interruption insurance to protect you in the event that your usual place of work becomes compromised or inaccessible. It is little-known that up to as many as 40% of businesses are unable to re-open following a disaster due to not having business interruption insurance. That way, even if you can’t access your business premises for a prolonged period of time, you can cover the cost of any additional expenses incurred with running your operation during the period of disruption. Critical Illness cover for self-employed workers If you’re a self-employed sole trader, the chances are you only make money when you work. So if you find yourself in a position where your ability to work is compromised by illness, you’ve effectively lost your source of income. Unfortunately, with one in two of us now expected to contract a form of cancer in our lifetime, Critical Illness cover is a lifeline for self-employed workers who find themselves unable to perform their duties due to ill health. You’ll need to declare a family history of any hereditary debilitating diseases and pre-existing medical conditions, but providing you’ve been honest at the time of application, you’ll be able to claim a lump sum payout on a Critical Illness policy to see you through until you recover. Goods in Transit Insurance If your line of self-employment sees you shipping homemade goods, second hand antiquities, or other stock items nationally or worldwide, it’s advisable to protect those goods from loss or damage with a Goods in Transit insurance policy. That way you won’t be personally liable for the costs associated with damage claims, or items that fail to arrive at their final destination. The majority of Goods in Transit policies cover road and rail travel as standard, while air travel and international transit by shipping normally need to be negotiated as a policy extra. If the value of the goods you’re shipping also exceeds £10,000 you may be wiser taking out Export Insurance instead. Credit insurance for self-employment In self-employed businesses, it’s common to carry out agreed works upfront and then invoice the client for them at a later date, but unfortunately, this nature of arrangement can leave you financially vulnerable – especially if you’ve covered material costs out of your own pocket. Credit Insurance is specifically designed to protect self-employed business operators whose clients fail to pay or are unable to pay because they’ve gone bust. The cover can be uniquely tailored to protect the cost of your entire operation or just to cover specific contracts with select customers. While it might not be necessary for every form of self-employment, if you’re repeatedly offering lines of credit to your customers, then Credit Insurance is a very sensible policy type to invest in. What business insurance do I need? If you’re operating as a self-employed small business owner or a sole trader in the UK and unsure about the types of insurance required for your business, read this useful guide to get you started, or speak to a specialist insurance broker who will be able to run through your individual business and insurance elements you should be considering.