What insurance do I need if I am Self-Employed?
BY READERS DIGEST
2nd Jun 2021 Insurance & Legal
A recent census carried out by Statista recorded a total of approximately 4.31 million self-employed people in the United Kingdom (February, 2021). While working for yourself is a great option if you're good at managing your time and your own business, there are some important things you need to know about insurance to ensure you're ticking all of the boxes
On average, there are more self-employed males than females and the age-group falls between around 45 and 54 years.
The figure of self-employed individuals has grown steadily over the last two decades, reaching a peak of 5.03 million in early 2020.
However, in the midst of the Coronavirus pandemic, self-employment levels did show a decrease—the lowest since mid-2015.
Regardless of the recent drop, a large proportion of the British workforce identify as self-employed. For this reason, it is important to make sure that you have the correct type of insurance.
What does it mean to be Self-Employed?
Self-employed individuals are those who do not work for a specific employer but instead earn an income by directly contracting with a trade or business.
Among the top jobs for self-employment are real estate and skilled trades such as carpenters and builders.
What is professional indemnity insurance?
Professional Indemnity Insurance covers you for any alleged mistakes with your work. This can encompass anything that may cause financial loss for your clients including perceived bad advice, poor design or inadequate services.
Typically, professional indemnity insurance covers the cost of your legal defence and any financial compensation for your client. Depending on your area of work, your legal requirements will vary but professional indemnity cover might include:
- Defamation, a situation in which the character of any personal or organisation has been damaged, including libel and slander and any mental or emotional distress caused
- Negligence or dishonesty this will cover you if a client believes you were negligent or dishonest in your work
- Claims expenses this covers against any legal costs for any claims made against you or your business
- Information Security & Privacy Liability this protects you against any legal issues as a result of data breaches or hacking that compromises client data
- Intellectual Property Infringement these are claims in which the work you have produced is alleged to be similar to someone else’s work
Do I need professional indemnity if I am Self-Employed?
If you give personal or professional advice as part of your self-employment, you definitely need professional indemnity. This can include advice, services or designs on which clients depend.
Accountants, architects, financial advisors, property surveyors and medical professionals are all examples of professions which require. Professional Indemnity insurance. Legal professionals and solicitors are required to have their own kind of Professional Indemnity Insurance.
What does professional indemnity include?
Depending on the insurance policy, professional indemnity tends to include negligence, breach of duty, civil liability and errors and omissions. Professional indemnity insurance should also cover any liabilities as a result of negligence - these include any legal costs incurred from being sued as well as business interruption.
Is it worth taking out public liability iInsurance if you are Self-Employed?
Although it is not a legal requirement for most businesses, self-employed public liability insurance is necessary if people visit your business premises.
For some customers, they may demand that you have public liability cover in order to protect themselves. Therefore, it may be in your best interest to take out Public Liability insurance.
What happens if you are not covered by professional indemnity insurance?
If you do not have professional indemnity insurance, you could be liable for any costs of claims made against you. In short, that could mean paying a huge compensation out of your own pocket.
How much does professional indemnity insurance cost?
Policies vary but professional indemnity insurance policies with get indemnity™ can start from £322 per year or monthly fees of £26.83 for up to £1 million coverage.
Costs vary from insurer to insurer but working with a specialist Professional Indemnity broker will explore the best options available on the market for your specific needs and subsequently help to save money in the long term.
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