Do I need business insurance if I'm self-employed?

When you work for yourself, the responsibility sits with you.

But there's also nobody else between you and the client when something goes wrong. A professional mistake, damaged property, contractual dispute or cyber attack can land directly with you.

So does every self-employed person have to buy business insurance? No. But there are some very good reasons to understand when you might need it.

Sometimes the client decides for you.

For many contractors and freelancers, the first serious conversation about insurance begins when a new client sends over a contract.

It might require £1 million of Professional Indemnity, £2 million of Public Liability, or both.

That doesn't necessarily make the insurance legally compulsory. It does, however, make it commercially necessary if you want to undertake that particular piece of work.

Do clients rely on your expertise?

Consultants, developers, designers, recruiters and other independent professionals can face allegations that their work or advice caused a client financial loss.

Imagine you're running a one-person consultancy and a client alleges that a recommendation you made cost them £75,000. The fact that you're self-employed doesn't make the allegation any smaller.

Professional Indemnity can help with eligible claims arising from professional advice, services or mistakes.

Explore Professional Indemnity →

Do you work around people or their property?

You don't need a shop, warehouse or large office to have Public Liability exposure.

A consultant can damage equipment while visiting a client. A tradesperson can accidentally damage a customer's home. Someone can be injured while visiting your workspace.

Public Liability can help protect against eligible claims involving injury to other people or damage to their property.

Explore Public Liability →

What happens when you employ someone?

This can change your insurance requirements significantly.

Most UK businesses employing people are legally required to have Employers' Liability Insurance, although limited exemptions apply.

So taking on your first employee isn't just an important moment for the business. It's also a sensible time to review your insurance.

Explore Employers' Liability →

What if you work from home?

Your business risks don't disappear because your office happens to be the spare bedroom.

Clients can still make claims about your work, your laptop can still be compromised and business equipment can still be lost or damaged.

You also shouldn't assume your home insurance automatically covers everything connected with running a business. Check what your policy actually includes.

How dependent are you on technology?

For plenty of self-employed businesses, losing access to email, a laptop, cloud storage or online banking would make operating extremely difficult.

That's why Cyber Insurance isn't exclusively a big-business conversation. The more dependent you are on technology and information, the more worthwhile it is to understand the risk.

Start with what you actually do.

“Self-employed” tells you how you work. It doesn't tell you what risks you face.

A self-employed plumber, software developer, management consultant and online retailer can all need completely different protection.

Start with the business itself. That's a much better guide to the insurance worth considering.