Business insurance can be cheaper for the self-employed than for a company. According to NimbleFins, the average cost of public liability insurance for sole traders is around £65 per year for a £2 million policy. This is around 50% cheaper than the typical cost public liability insurance for a small business, which is around £118 per year on average.

Public liability insurance protects from claims made against a business by third-parties for accidents or incidents resulting in loss, injury, or damage. Costs incurred can include items like medical treatments or visits, repair or replacement of items, compensation payments, and legal fees. Having a public liability policy prevents businesses from being personally liable for such costs.

While the policy amount of £118 per year is an average number, the actual amount may vary depending on the nature of the business that is being operated. Higher risk occupations such as roofing will have much higher premiums to cover any accidents or incidents associated with the job.

How to get public liability insurance for self-employed

Public liability insurance may be obtained from several sources. If your business has a current insurance provider they will be able to help. Or an insurance broker will be able to locate a suitable policy for your business. Alternatively, there is the option of purchasing directly from a provider like Axa or Direct Line.

Assessments will need to be made to ensure the correct level of protection for your business. For example, if you operate a small boutique the coverage needed will be much less than for a scaffolding company. It is important to have the correct level of coverage in place to shield from financial liability. Prices and premiums can vary across providers as can things like policy excess amounts which can vary depending on the type of business you operate.

Before making a purchase it is wise to research and compare a range of policies from different providers to check the variance in annual premiums. NimbleFins public liability insurance quote comparison can help to quickly review numerous policies and their features to target the best deal.

Self-employed public liability insurance cost

Depending on the needs of the business, public liability policies are available in different amounts. Cover starts at £1 million and rises incrementally to £10 million. For big organisations that require higher levels of protection, larger policies are available.

Any business that comes into contact with the public can be at risk of claims. The highest incidence of claims are generally from the following occurrences:

Damage or injury caused by falling objects

  • Damage from unprotected objects to a person or their property
  • Slips, falls, and trips

Insurance premiums will be impacted by the structure of the business (sole trader, partnership, etc) and the business functions performed. The cost of annual premiums will fluctuate based on the risk level of business functions and other factors. For example, here are some sample average public liability prices for a few different self-employed occupations:

Examples:

Profession Average annual premium
Cleaner £52
Artist £68
Builder £82

 

What insurance do I need to be self-employed?

For self-employed business owners, there are several insurance protections to be considered. While not all are mandatory it is common sense to have some of them in place to provide adequate financial coverage in the event of any problems.

In the case of public liability insurance, it is not required by law, but in the event of any accidents or damages, it will protect you from personal financial liability. Proof of public liability can be requested by clients before allowing work to be performed. This is to ensure that adequate protection is available should there be any incidents.

If you employ even one person you will be legally required to have employer’s liability insurance. If an employee suffers personal injury, illness or damage to property caused by working for your business then a claim can be brought against your company.

Professional indemnity insurance is to safeguard your business in the event of any mistakes, negligence, or bad advice that you could potentially be sued for. It protects from accidental breaches of confidentiality, errors and omissions, and personal injury to third-parties.

To protect yourself from accident or injury you may elect to have personal liability insurance. While this is another insurance that is not legally required it can cover personal injury or death associated with business operations.

If your business requires the use of specialised tools or equipment you may want to invest in equipment damage cover. This will protect from damage, losses, or theft both during and after business hours. It will cover the cost of repair or replacement of essential items needed to operate your business.

For any business that uses vehicles to transport people, provide services, or move goods commercial vehicle insurance will be needed; personal cars used for business purposes like visiting clients need to have ‘business use’ declared to the insurer. This will protect vehicles from accidents, injury, or damage during travel, or from losses and damage due to theft or vandalism.

By Lisa Baker, Senior Editor

Senior Editor Lisa Baker is the owner of Need to See it Publishing Group, providing contract news for business and news sites across the UK. Lisa is an experienced HR writer and commentator, editing HR publications for more than 5 years.