Working for yourself can be an exciting and rewarding career, but it can also increase the risks you face when it comes to liability or injury.

So it’s essential that you have the right insurance in place to protect your income and business.

But do you know what type of business insurance you should have as a freelancer or self-employed consultant?

That’s the question this article answers.

Types of business insurance for self-employed contractors

Whether you need to protect yourself against a liability claim based on advice you give as a consultant, or if a customer is injured as a result of your work, it’s essential you have insurance behind to cover your costs.

Without insurance, you not only risk paying out insurance claims but also potentially expensive court costs.

If you have insurance, you’ll have the peace of mind that you have finances in place to cover any costs you encounter as a result of a claim, or while you defend yourself.

Here are the types of freelance business insurance you should consider:

General liability insurance

This provides coverage for injury or property damage that occurs in the course of your work.

This would be important if you have a workspace related to your business where customers can come to.

If a customer is injured while on your premises, this insurance will cover you.

Professional liability insurance

If you’re a lawyer, accountant or consultant who advises customers and they suffer financial losses as a result of your error or negligence, you could be sued for these losses.

For example, if you’re an accountant and you make a mistake on a client’s tax return that leads to financial losses, professional liability insurance covers the cost of any legal fees and damages awarded to the client.

Commercial vehicle insurance

Commercial car/vehicle insurance covers you against the costs of any damage or loss to your business vehicle, including accidents, vandalism or theft.

If you use a vehicle for your work (even if it’s a personal verhicle) you need to have business insurance in place if you use the vehicle for work.

If you’re a plumber for example you would need commercial vehicle insurance to cover any damages resulting from a car accident while driving to a job, or if someone broke into the vehicle.

Similarly, if you’re a consultant who drives to client offices, you’d need commercial insurance on your car to cover you when using the vehicle for business purposes.

Cyber liability insurance

Many self-employed contractors don’t consider the risks from cyberthreats because they assume as a single person business they’re ‘too small’ to be attacked.

However it’s this thinking that puts them at risk because they usually have less security in place as a result.

Cyber liability insurance protects you from financial losses or damages caused by a cyber attack – like a data breach.

This type of business insurance is particularly important if you’re an accountant or store sensitive personal or commercial information for your customers.

Understanding your insurance needs as a contractor

If you’re self-employed you’re responsible for arranging your own insurance.

With this in mind there are a few things you should consider when looking at how much cover (and what type of cover) you should get:

• Where are the risks coming from?
• What’s the value of the assets in your business?
• Do you need client specific insurance as part of your contract?

Protecting yourself as a self-employed contractor

Being self-employed gives you a lot of freedom over how you work, where you work and who you work with.

But it also puts a lot responsibility on you to make sure you have all the insurance cover you need to protect you and your business in the event of an accident or a claim.

Speaking with a professional insurance broker is the best way to get advice on exactly what type of cover would be best based on your business, as well as making sure you get the right level of insurance cover.