These days more and more workers are discovering the joys of working for themselves, moving on from traditional workplaces to become self-employed or start their own small businesses.
Whether you’re self-employed and work alone, or self-employed and employ a small team, it’s down to you to ensure you have adequate insurance cover.
Business insurance - the basics
Where to start with this can be confusing, so we’ve highlighted the most common types of insurance cover purchased by the self-employed to help you make an informed choice.
Office contents insurance
Cover for your office contents and workplace equipment to make sure you’re not out of pocket in the event of a loss, such as theft, fire or water damage.
Professional Indemnity insurance
An important cover for freelancers and the self-employed who give advice or provide a professional service to clients. It can pay for compensation claims and legal fees that may arise if a client suffers a financial or professional loss due to negligence in your work. For example, if you’re a web designer and a client gets sued by image owners for using unlicensed pictures on their website, the client would sue you but your insurance would pay out to cover these costs.
Public Liability insurance
Provides cover against claims made by members of the public who have suffered an injury or damage (including to their property) in connection with your business. For example, if you have clients at your office, it is important to ensure you have protection in place should they trip over a piece of your equipment and injure themselves. This can also apply if you visit them on their premises and, as an example, damage some of their property.
Employers Liability insurance
If you have employees, contractors, casual workers or temporary staff, you are required by law to take out employers’ liability cover, to deal with any claims from employees who’ve been injured or become seriously ill as a result of working for you.
For freelancers and the self-employed, who regularly travel with portable laptops and emails on their phones holding data about their clients, the risk of losing that data has increased. At the same time, cyber criminals are becoming more aware of the value of this data and increasingly looking for easy targets. This type of cover protects you if you lose data, even if you were negligent, or are subject of an attack by a malicious hacker that affects your computer systems. It also covers the response costs, such as notifying everyone whose data has been lost.
Directors & officers liability insurance
If you are a director of your business, this covers the cost of compensation claims made against directors or key managers by shareholders, investors, employees, regulators or third parties
Legal protection cover
Finally, legal protection insurance covers you against the cost of taking legal action should a situation arise, for example, if there’s a commercial dispute and a client or employee takes you to court.
Spotlight on: Professional Indemnity Insurance
Experienced and new freelancers alike, you want to provide excellent service and advice to your clients. But what if one of your clients feels like your advice or work has resulted in financial or reputational damage and asks to be compensated? That’s where professional indemnity cover comes in…
What is professional indemnity insurance?
Professional indemnity insurance covers individuals or organisations providing professional services to clients against things going wrong, which lead to expense either for the client or the provider. This could include claims stemming from breaches of professional duty, negligence, or just plain human error. Protecting your finances with professional indemnity insurance means you would be able to continue business as usual in the event of a case made against you.
Do I need it?
Unlike some industries, professional indemnity insurance is not mandatory for the self-employed or freelance workforce, but for some it’s considered essential business insurance. If you are providing advice or work where financial or reputational damage could incur, then you could benefit from this.
If a business acts on your advice or uses your work and it results in damage to its finances or reputation, they could take action against you. Without insurance you may have to pay legal costs and damages out of your own pocket.
How do I choose the right policy?
Unlike home, car and travel insurance policies, which usually have a standard upper limit (the maximum amount your insurer will pay out in the event of a claim), professional indemnity policies often have a choice of limits depending on your industry and your clients’ needs. Your relevant industry bodies may well make a recommendation on which one you should choose.
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Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article. This article has been compiled using information available to us up to 24-04-2018.