Do I Need Insurance If I’m Self-Employed?

November 30, 2023


Let’s face it: ditching the office cubicle and exchanging it for the opportunity to work as a self-employed individual is tempting. Technically, being self-employed can pose a whole host of other challenges, but for many it can be more rewarding to work on your own hours and control the way that you do business. You’re your own boss – you get to make the big decisions!

Unfortunately, there are too many things that happen in our professional and personal lives that cannot be controlled to a tee. Going solo still has its risks. You may lose out on the protection that you would otherwise have from an employer, including a large number of financial risks. However, not all is lost. There are still ways to get insured while being self-employed.

In this blog post, we break down all the different elements of self-employed insurance and answer some frequently asked questions.

What is self-employed insurance?

Self-employed insurance protects you and your business if anything disastrous should happen. This can protect you from damages to your business and/or business property, as well as any equipment, tools, computers, etc., but it can also lessen or cover liability expenses that may come of being sued by a client or third-party.

Self-employment insurance may look differently depending on the size and scope of your business, but the core coverage is the same. The exact coverage you need may depend on if you have any staff, if you have any investors or shareholders, if you have any commercial machinery, equipment, or tools, what type of business you run, and what services and/or products you sell.

Types of self-employed insurance

Businesses vary depending on what they do, what their brand is like, and how big they are. In order to ensure everything can have protection, businesses will need to invest in insurance specific to the risks they face. This is still true if you are a self-employed individual trying to protect your bottom line.

See the following for examples of different types of self-employed business insurance:

Building insurance

If you operate out of an office or commercial space, you may want to acquire building insurance or commercial property insurance. This can protect your business for the cost of damages or the loss of assets that belong to your business. Losses may occur as a result of fire, vandalism, theft, etc. This is not a necessary coverage, but if you rent or have a mortgage you may need to show proof of insurance.

Worker’s compensation

If you have any individuals employed within your business, you need to have employer liability insurance or what is sometimes referred to as “worker’s compensation.” This is a legal requirement and not just a recommendation. Depending on the scope of your business, you may be required to carry a certain minimum amount of liability – and without this, you could be faced with hefty fines. Your workers’ compensation insurance may cover any compensation, settlements, or legal expenses if an employee makes an injury or work-related illness claim.

Professional liability

If the work you do includes any professional services or advice, you may need to inquire about professional liability insurance. This is because certain industries and risks may require additional coverage. For example, medical practitioners need medical malpractice insure to protect them from claims of error or negligence while offering a promised service or advice.

If you work as a counselor, therapist, financial advisor, etc., you will need to consider acquiring professional liability insurance in order to have sufficient protection.

Life insurance

Life insurance is no different if you are self-employed, but know that in many instances if you operate as a self-employed individual you will have to purchase your own separate policy. In many cases, if you had an employer and worked at a company, you would have some form of life insurance or benefits as an employee. As a self-employed individual, you are on your own.

A life insurance policy can ensure that your family and/or dependents will receive compensation in the event of your death.

Do I need business insurance if I work from home?

Thanks to so many technological advancements in recent years, many people are choosing to work from home. Some people work from home permanently, and many run small businesses out-of-home. Self-employed individuals may opt to make their home the place of work, especially as this reduces any costs that may come with renting an office.

But when you work from home, do you need business insurance? It depends. Call up your insurance provider to disclose your decision to work from home. They may ask you about your business, whether you keep any commercial equipment at home, and if clients are going to be visiting your home. They may recommend adjusting your coverage to include any property or additional risk. This may also increase your premiums as a result. It is important to update your insurer to guarantee that you can receive payout in the event you should need to make a claim!

Remember that every business is different, whether you are a self-employed individual or not. The business world and the world of business insurance can be complicated because there are so many products available to ensure that every organization can have their relevant exposures covered. It may be difficult for you to navigate which is right for you and your circumstances. So, the question remains, what product do you need? What insurance provider should you go with?

With access to some of the top insurance carriers around, Excalibur Insurance is here to discuss your commercial needs as a self-employed individual. We can assess your requirements and shop the market for the best products that suit you and the type of work that you do.