You need self-employed business insurance if you run your own business. This is because the freedom that comes with being your own boss has its challenges\u2014whether you\u2019re a freelancer, 1099er, or \u201csolopreneur.\u201d Aside from drumming up deals and juggling clients, you\u2019re also going to need to safeguard your business from financially disastrous problems like accidents, damaged business property, and lawsuits.<\/p>\n\n\n\n
Think of it as a custom-made small business insurance policy that has all of the essential coverage types to protect your particular business from its unique risks.<\/p>\n\n\n\n
A good self-employed insurance policy has several different types of small business insurance that cover a range of problems. These include lawsuits against your business, lost income due to problems covered by your policy, and damage to your business property.<\/p>\n\n\n\n
When you\u2019re putting together a self-employed insurance policy, you may want to start by looking at a business owners policy (BOP). A BOP bundles three foundational coverage types, and it\u2019s usually a more affordable way to buy business insurance rather than purchasing these coverages separately. <\/p>\n\n\n\n
Here\u2019s what a BOP includes:<\/p>\n\n\n\n
This covers property damage and bodily injuries caused to others (not including your workers). For example, if you run a food catering business and a guest burns themselves on a chafing dish, general liability insurance can cover the person\u2019s medical expenses. <\/p>\n\n\n\n
Liability insurance also pays for your legal costs, settlements and court judgments if you\u2019re sued because of an accident.<\/p>\n\n\n\n
If a problem covered by your policy causes you to close your business temporarily, business interruption insurance replaces lost income. For example, this would replace your lost earnings if a fire at your business location caused a temporary closure. It also covers money lost due to damaged merchandise and the cost of moving to a new location on a temporary basis. <\/p>\n\n\n\n
This coverage is also called \u201cbusiness income insurance.\u201d<\/p>\n\n\n\n
This covers your business equipment and your business location if it\u2019s damaged due to a problem covered by your policy, such as a tornado. Examples of items covered by commercial property insurance include both owned and leased items, such as computers, office furniture, inventory, supplies, valuable papers and business records.<\/p>\n\n\n\n
Many businesses share similar characteristics, but it\u2019s the little details that set them apart. Since every business is different, their insurance needs are also unique. <\/p>\n\n\n\n
Self-employed insurance typically includes:<\/p>\n\n\n\n
General liability insurance is the first type of business insurance most self-employed business owners purchase. If you already crossed that one off your list, good for you. <\/p>\n\n\n\n
While sometimes called \u201cslip and fall insurance,\u201d general liability covers situations where your business may be responsible for an accident that injured someone or damaged property that doesn\u2019t belong to you. Often, you can\u2019t get hired or start jobs without providing a certificate of insurance with active general liability coverage for your business. <\/p>\n\n\n\n
If you\u2019re doing anything other than making the occasional coffee run, you might not be covered by your personal auto policy if you drive for business reasons.<\/p>\n\n\n\n
Commercial auto insurance can help cover expenses if you get into an accident while driving to meet clients, drop off equipment, make deliveries and a variety of other tasks you might be doing behind the wheel during your workday. Just like your personal auto insurance, commercial auto will cover injuries or property damage if you get into an accident at work.<\/p>\n\n\n\n
You\u2019ve probably heard horror stories of an unruly customer who turns a minor disagreement into a full-blown legal battle. It happens in almost every industry. <\/p>\n\n\n\n
If you\u2019re accused of making a mistake or being negligent, errors and omissions can help cover expenses if you have to go to court or take steps to fix a problem. In some industries, E&O coverage is known as professional liability insurance.<\/p>\n\n\n\n
Commercial property insurance basically covers all of the things you need to do business \u2014 your equipment, furniture, inventory and the structure where you work if you own it.<\/p>\n\n\n\n
When you have property insurance, you\u2019ll have help replacing your stuff or repairing your damaged building after a covered event, such as a burst water pipe, fire, tornado or vandalism.<\/p>\n\n\n\n
A lot of people think that you only need workers\u2019 compensation insurance if you have employees. The reality is that workers\u2019 comp can also cover your medical expenses and lost wages if you are self-employed with no employees. Just make sure you have business owner\u2019s coverage with your policy.<\/p>\n\n\n\n
Most states require this coverage as soon as you hire your first employee, so it\u2019s important to know the rules where you work.<\/p>\n\n\n\n
Here are a range of insurance needs you might have to consider for your business.<\/p>\n\n\n\n
If your business uses vehicles, make sure that your policy includes cover for business use. This also includes any private policies where an employee is driving their own vehicle in connection with your business.<\/p>\n\n\n\n
If you\u2019re unsure, get them to check with their insurer to confirm that business use is included.<\/p>\n\n\n\n
If you employ people, you must have insurance cover to pay compensation to employees injured while doing their jobs. This is a legal requirement.<\/p>\n\n\n\n
Are you a professional who gives certain types of advice or services to your clients? Then you should have professional indemnity insurance. It can offer protection for your small business if a client claims you’ve been negligent, given poor advice or made a mistake.<\/p>\n\n\n\n
The types of businesses that use this kind of insurance include:<\/p>\n\n\n\n
This will protect you from loss if your premises and its contents are affected by fire, flood, theft and other damage.<\/p>\n\n\n\n
The right level of cover will depend on whether you own or lease your premises, as well as the value of your buildings and their contents.<\/p>\n\n\n\n
The kit and machinery you use for your business can be insured for the cost of replacing them or their current value, taking wear and tear into account. You can also get policies to protect machinery and IT equipment against breakdown.<\/p>\n\n\n\n
This could be worth thinking about for all your equipment, or even just the essential equipment you wouldn\u2019t be able to work without.<\/p>\n\n\n\n
Tradesmen\u2019s tools can also sometimes be added to another liability insurance product. So it\u2019s worth asking if this is possible if you have public liability insurance.<\/p>\n\n\n\n
Sometimes also called key man insurance, this covers the business up to an agreed limit for any financial losses that would result from the sudden death or illness of a crucial member of the company. This includes the owner or manager.<\/p>\n\n\n\n
People who could be covered include:<\/p>\n\n\n\n
This pays out in the event of a mistake by any of your business activities that cause injury or damage to a customer or member of the public.<\/p>\n\n\n\n
For example, you should be covered if a member of the public trips and gets injured because of a spill on a shop floor that isn\u2019t marked with a warning sign. You\u2019re more likely to need this if people visit your premises, for example, if you run a shop.<\/p>\n\n\n\n
For a few businesses, including horse riding stables, it\u2019s a legal requirement. Customers might want to see proof of adequate insurance before they do business with you.<\/p>\n\n\n\n
If goods you\u2019ve made, sold, or repaired either hurt or kill someone or damage someone\u2019s property, you might have to pay compensation. You could be held liable for the damage or injury caused by defects in your product design or manufacture even if you haven\u2019t been negligent.<\/p>\n\n\n\n
If your business is in a particularly high-risk sector, such as food and drink, the toy or electrical industry, you really need to consider this.<\/p>\n\n\n\n
Product liability cover is often included with public liability insurance.<\/p>\n\n\n\n
Do you have goods or stock you send around the country? Then you might want to think about protecting them in case they\u2019re lost or damaged while being transported.<\/p>\n\n\n\n
It usually covers road or rail and can often extend to inland or coastal waters. International transit by sea or air needs to be insured separately.<\/p>\n\n\n\n
This protects you against the risk of your customers not paying you because they go bust or don\u2019t pay in time. You can tailor the cover to suit your needs \u2013 to cover the whole of your turnover or just that of key customers.<\/p>\n\n\n\n
You can also protect yourself against the risk of not being paid by overseas customers.<\/p>\n\n\n\n
However, you\u2019ll still have to carry some of the risk yourself \u2013 so the insurance might cover you for 80% and you\u2019ll have to bear the remaining 20%.<\/p>\n\n\n\n
The exact cost of self-employed insurance varies based on several factors, including:<\/p>\n\n\n\n
Here are examples of how the cost of self-employed insurance can vary depending on your profession. Costs will depend on your type of business, what coverage types you buy and other factors.<\/p>\n\n\n\n