If you’re self employed, you’re probably already familiar with the many bits of paperwork you need to sort out: tax returns, company registration and accounts are just a few of them! But one thing you shouldn’t overlook is your insurance coverage – in fact, some policies are a legal requirement for those who run their own business. This article will take you through the essentials, and another couple of optional policies you may want to consider.

Employers’ liability insurance

This is only a legal requirement if you employ another person, and only if they are not a close family relative. The minimum amount of cover required is £5 million – this seems like a lot, but the fine for failing to have this policy in place is a heavy one! Employers’ liability insurance covers you in case any of your employees have a work-related accident.

 

 

Vehicles insurance

If you use a vehicle for business purposes, it needs to be insured accordingly, even if it’s already insured for private use. This is in case you’re involved in an accident while on a business journey – the other party may have the right to sue your business if the accident was your fault. If you log the number of miles you drive for business purposes, you may qualify for a better deal from your insurer.

Public liability insurance

Public liability insurance is not a legal requirement per se, but it is crucial if you ever plan to have anybody other than yourself visit your workplace – even if that’s a small home office. Unless you’re absolutely sure that a client will never need to come to your place of work, it’s a good idea to get at least a low level of public liability cover.

Professional indemnity insurance

Again, this is not a legal requirement, but it is a good idea if you’re in any business that involves giving providing services or giving advice to clients. The level of risk varies – for instance, a graphic designer will likely need a lower level of cover than a chartered accountant – but it’s worth having if it applies to you.

Health insurance

When you’re self-employed, your body is one of your most important assets – and you might have to make tough decisions regarding sick pay if you need to take time off for illness. Private health insurance for the self-employed is not a legal requirement, but it can certainly come in handy.  Fortunately, the self employed often qualify for discounted rates compared with privately-employed people.