Working as a sole trader and being self-employed can be liberating as you can work your own way, when and where you want but it also means you will be responsible for all liabilities and your income is reliant on you being able to work.
So, taking out insurance to protect you from any claims of compensation, cover your equipment and possibly protect your income could be an essential business expense.
Depending on your business you may be legally required to have public liability cover if you work in public spaces or people’s homes, or members of public come on your premises. We have explored what some of the insurance providers can offer sole traders and the self-employed.
The table below gives a quick comparison of the top UK providers for self-employed and sole trader insurance.
| Company | Minimum Cover | Maximum Cover |
|---|---|---|
| Aviva | Not stated | £5 million |
| AXA | Not stated | £10 million |
| Direct Line for Business | Not stated | £10 million |
| Zurich | Not stated | £10 million |
| Ageas | Not stated | Not stated |
| Lloyds Banking Group | Not stated | Not stated |
| Liberty Mutual | Not stated | Not stated |
| Covéa | Not stated | £10 million |
| Hiscox | Not stated | £10 million |
| Markel direct | Not stated | £10 million |
| Churchill | Not stated | £10 million |
| Vitality | Not stated | £20 million |
| ARO Insurance | Not stated | £10 million |
* The facts and figures included here come from each company’s website and were accurate at the time of writing but may have since changed. Also, please keep in mind these may not be apples to apples comparisons as each provider offers different solutions. This guide should be used as a starting off point for more research on your part.
Below we profile each of the companies’ services and features in a bit more detail.
Topics
1. Aviva
Some of the features and benefits of Aviva’s self-employed and sole trader insurance.
- Insurance designed for the self-employed including contractors, freelancers or sole traders
- Cover to provide protection against claims for damage or poor advice
- Peace of mind cover
- Tailored cover to suit your needs
- Public liability insurance
- Tools, stock and business equipment insurance
- Professional indemnity insurance
- Offers a range of other complementary covers
- Add business income, employer’s liability, vehicle, buildings and contents insurance
- Available directly from Aviva
Aviva is an insurance provider that offers a broad range of business insurance that is tailored to meet the needs of a variety of businesses including self-employed or sole traders. They offer tailored insurance designed specifically for the self-employed which includes contractors, freelancers and sole traders.
Aviva’s self-employed insurance includes public liability insurance with up to £5 million cover; tools, stock and business equipment insurance up to £30,000 cover; and professional indemnity insurance up to £2 million cover. They also allow you to add other cover to the policy so that it can meet all your needs, such as business income, employer’s liability, vehicle, buildings and contents insurance.
2. AXA
Some of the features and benefits of AXA’s self-employed and sole trader insurance.
- Designed for established businesses and new start-ups
- Tailored insurance to meet your needs
- Protection against the cost of claims
- Choice of cover to combine in a single policy
- Public liability
- Employer’s liability
- Professional liability
- Offers a wide of optional extras
- Insurance from as little as £42 per year
- Offers 10% online discount
AXA is an insurance provider that offers a variety of business insurance that is tailored to specific businesses needs and this includes self-employed insurance. Their self-employed insurance is designed specifically for the self-employed and caters for both existing and new self-employed businesses.
AXA’s self-employed insurance enables businesses to select what cover they want to include from public liability, employer’s liability with £10 million cover as standard, and professional indemnity insurance. They also allow you to add appropriate optional extras such as tradesman cover (tools, plant and equipment), business equipment cover, personal accident cover, breach of confidentiality and infringement of copyright cover.
3. Direct Line for Business
Some of the features and benefits of Direct Line for Business’ self-employed and sole trader insurance.
- Insurance designed for contractors and freelancers
- Cover that can be tailored to your needs
- Professional indemnity
- Public liability
- Employer’s liability
- Contents and stock
- Business interruption
- Legal expenses
- No admin fees and 0% APR on monthly direct debits
- Offer a guarantee to beat any other quote
Direct Line for Business is an insurance provider that has a range of business insurance that is designed for smaller businesses. They offer contractors and freelance insurance that is suitable for the self-employed and sole traders. You can manage your insurance online and access your documents at any time for evidence for clients.
Direct Line for Business’ contractors and freelance insurance has been created as a build your own insurance package where you can select the cover included. The package includes public liability insurance up to £10 million, employer’s liability insurance, professional indemnity, contents and stock, business interruption up to £25,000, cyber cover and legal expenses.
Direct Line for Business website
4. Zurich
Some of the features and benefits of Zurich’s self-employed and sole trader insurance.
- Trades and professions insurance
- Designed for small business with up to 15 employees
- Available to a wide range of professions
- Tailored cover
- Public and product liability
- The choice to extend cover to £10 million
- Data protection cover included
- A range of optional cover
- Add personal accident, contractors’ all risks and business contents
- Available to businesses with a turnover below £1.5 million
Zurich is an insurance provider that offers a variety of business insurance that is designed for specific trades or professions as well as general insurance products. They offer a tailored package for trades and professions that are designed for businesses with up to 15 employees and a turnover below £1.5 million.
Zurich’s trades and professions insurance includes public and product liability with cover of £2 million which can be extended to £10 million and it also includes data protection cover as standard. They also offer a range of optional cover such as personal accident, contractors’ all risks and business contents insurance.
5. Ageas
Some of the features and benefits of Ageas’ self-employed and sole trader insurance.
- Tradesman insurance that is suited to self-employed or sole traders
- Essential insurance cover for small businesses
- Tailor the policy to your needs
- Public and product liability
- Employer’s liability
- Tools and stock in transit
- Legal expenses
- Personal accident
- Business interruptions
- Available through a broker
Ageas is an insurance provider that offers a wide range of business insurance that can be tailored to meet your business needs by letting you select what cover you want to include in your policy. They offer tradesman insurance that is suited to the self-employed that are working in a trade.
Ageas’ tradesman insurance offers a wide variety of insurance cover for you to choose between which includes public and product liability, employer’s liability, tools which covers all risks and stock in transit, contractors’ all risks contract works and plant, legal expenses, personal accident and business interruptions.
6. Lloyds Bank
Some of the features and benefits of Lloyds Bank’s self-employed and sole trader insurance.
- Public liability for tradesman and self-employed
- Tailored solutions
- Select from a range of optional extras
- Protection from compensation costs and claims
- Easy to buy
- Option to add employer’s liability insurance
- Can add professional indemnity insurance
- Provided in partnership with one of the largest UK insurance brokers
- Quotes from a panel of insurers
- Cover from £53 per year
Lloyds Bank is a financial provider that also offers business insurance in partnership with Arthur J. Gallagher which includes specific insurance products tailored to the needs of particular businesses and professions. Lloyds Bank sells their insurance directly to businesses and they make it easy to purchase and tailor the cover to your needs.
Lloyds Bank’s public liability insurance for tradesman and self-employed is designed to offer basic liability cover that can be extended to cover a wider range of insurance to provide greater protection for your business. Additional cover can include employer’s liability and professional indemnity insurance.
7. Liberty Mutual
Some of the features and benefits of Liberty Mutual’s self-employed and sole trader insurance.
- Business owner’s policy
- Suited to small businesses including self-employed and sole traders
- Combines business property and general liability insurance
- Provides a safeguard against common risks
- Property insurance cover for owners or rented premises
- Protection from claims for compensation and their costs
- Tiered insurance
- Can add data theft and cyber coverage
- Offered to a wide range of small businesses
- Available through a broker or independent agent
Liberty Mutual is an international insurance provider that offers a range of specialist insurance products for businesses which includes business owner’s policy. This policy is designed for small businesses which include those that are sole traders and the self-employed.
Liberty Mutual’s business owner’s policy has been designed to give small businesses the basic coverage that they need to operate as it covers their property and liability cover. The property insurance covers the property regardless of whether you own, lease or rent and it covers the fixed equipment and signage through to your inventory. Liability insurance protects your business from the costs of claims and compensation.
8. Covea
Some of the features and benefits of Covea’s self-employed and sole trader insurance.
- Tradesman and professionals’ insurance
- Designed for small businesses and the self-employed
- Core cover and range of optional extras
- Public and products liability
- Employer’s liability
- Tools and goods in transit
- Contracts works
- Own and hired in plant
- Accidental death
- Available to manual, clerical and professional trades
Covea is an insurance provider that offers a range of small business insurance products that cater for specific trades or professions. They offer tradesman and professionals’ insurance to a wide variety of small businesses through to the self-employed which includes manual, clerical and professional trades.
Covea’s tradesman and professional’s insurance offers public and product liability insurance as standard with complimentary accidental death cover as well as a range of optional cover to provide greater protection. They offer a variety of extra cover to choose from which includes employer’s liability, tools, goods in transit, contract works, own plant and hired plant.
9. Hiscox
Some of the features and benefits of Hiscox’s self-employed and sole trader insurance.
- Self-employed insurance
- Tailored insurance for freelancers, self-employed and sole traders
- Provides protection against claims for compensation
- Designed for the potential risks associated with working alone
- Caters for a range of businesses and will tailor their cover to your profession
- Professional indemnity
- Public liability
- Add office insurance, contractors, personal accident, cyber and data risk insurance
- Immediate cover
- No admin fees and 0% interest on direct debits
Hiscox is an insurance provider that offers a range of business insurance products to protect businesses from liabilities and claims that can damage the business and its reputation. This includes self-employed insurance which is designed for freelancers, self-employed and sole traders.
Hiscox’s self-employed insurance caters for a wide variety of businesses with cover that will be tailored to meet your profession’s needs. The cover can include public liability and professional indemnity insurance as well as a range of optional cover such as office insurance, contractors’ insurance, employer’s liability, personal accident, portable equipment, office contents, cyber and data risk insurance.
10. Markel Direct
Some of the features and benefits of Markel direct’s self-employed and sole trader insurance.
- Freelancer and contractor insurance
- Specialist cover designed for small businesses and sole traders
- Available to freelancers, consultants, designers and contractors
- Tailored cover to meet your needs
- A range of liability insurance
- Occupational personal accident insurance
- Directors and officers’ insurance
- Fast and easy online quote
- No hidden fees and interest-free direct debits
- Cover from as little as £5 per month
Markel direct is an insurance provider that offers a range of business insurance products that are designed for smaller businesses. They offer specialist cover such as freelancer and contractor insurance that caters for freelancers, consultants, designers and contractors. The cover can be tailored to meet your needs as you can select the cover you require to make your own package.
Markel direct’s freelancer and contractor insurance offer a variety of cover which includes professional indemnity insurance, public and product liability, employer’s liability insurance, directors and officers’ insurance, office insurance, occupational personal accident, legal representation and employment disputes, cyber and data risks insurance.
11. Churchill
Some of the features and benefits of Churchill’s self-employed and sole trader insurance.
- Public liability insurance for tradesman and self-employed professionals
- Protects against compensation claims from members of the public
- The core product is public liability insurance with optional extras
- Employer’s liability insurance
- Equipment cover
- Personal accident
- Business stock
- Contract works
- Own and hired in plant cover
- Available to a broad range of professions
Churchill is an insurance provider that offers a range of business insurance catering for smaller businesses with tailored insurance for specific professions or trades. They offer public liability insurance that is designed for tradesmen and the self-employed including a variety of trade professions, consultants, therapists and creative professions.
Churchill’s tradesman and self-employed professionals’ public liability insurance offers up to £10 million cover with a range of optional extras. Additional cover includes employer’s liability up to £10 million, equipment cover up to £10,000 per person, personal accident, business stock up to £5,000, contracts works up to £500,000, own and hired in plant cover up to £50,000.
12. Vitality
Some of the features and benefits of Vitality’s self-employed and sole trader insurance.
- Business life insurance
- Dedicated sole trader cover
- Personal protection
- Life cover
- Serious illness cover
- Income protection cover
- Financial protection in the event of being unable to work
- Lump sum payout to your family if you die
- Future proof your family’s finances
- Offers a variety of discounts and deals for members
Vitality is an insurance provider that specialises in health and life insurance policies and offers protection for individual employees. They offer sole traders all of their products so that they can benefit from the cover as much as larger businesses can.
Vitality offers sole traders three types of personal protection cover. Life cover which gives your family a financial payout if you die or are diagnosed with a terminal illness. Serious illness policy offers cover for 178 conditions and will financially support you through your illness. Income protection cover will start paying out once you have been off work for seven days.
13. ARO Insurance
Some of the features and benefits of ARO Insurance’s self-employed and sole trader insurance.
- Tradesman insurance
- Businesses with up to 10 employees
- Public liability
- Employer’s liability
- Option to increase public liability
- Available to a wider range of trades
- For businesses in Great Britain, Northern Ireland, Channel Isles and the Isle of Man
- Requires 1-year minimum experience
- Suitable for business with an annual turnover up to £750,000
- Available only through brokers
ARO Insurance is an insurance underwriter that offers a range of business insurance through a network of insurance brokers. They offer tradesman insurance that is available to a wider range of professions that are based in Great Britain, Northern Ireland, Channel Isles and the Isle of Man. It is only available to businesses with under 10 employees, minimum 1-year experience and turnover below £750,000 per year.
ARO Insurance’s tradesman insurance is available for tradesmen and professionals. It offers public liability insurance and employer’s liability insurance. The public liability insurance is set at £1 million but can be extended to £5 million. Employer’s liability offers £10 million of protection.
Financial Disclosure: We may be paid a fee if you purchase insurance via the Simply Business link at the top of this page.
FAQ
Does a sole trader have to have insurance?
Yes, a sole trader should have insurance. Insurance will protect your business and yourself should anything happen. It will protect you financially and mitigate certain risks, such as losing a key member of your staff, being sued by one of your clients, and any damages to your property or business.
Your business and yourself are seen as one legal entity, meaning that your personal finances are affected if something were to go wrong in your business. That’s a high risk, and you will want to be protected.
There are various insurance options. They depend on if you have several employees, if there are shareholders in your business, your assets, key staff members, the services and products you provide, and the type of business.
What insurance should the self-employed have?
As a sole trader, there are various insurance options that you should consider. Many suggest that your main cover should be public liability insurance.
So, what is it? This insurance protects sole traders and business owners if a customer or client sues them. Public liability cover will cover the legal fees and settlement money costs.
The amount of cover you’ll need also depends on several things. For example, if you come into contact with different people daily, if specific contracts you have require it, the amount of liability that your business is exposed to, and think of the worst that can happen – you do not want to be underinsured.
You may need public liability insurance along with some other cover, like employers’ liability; you will need this if you employ people. They will be compensated if they suffer an illness, injury, or disease while working for you. This cover is a legal requirement for those who employ people.
Vehicle insurance is also a good idea; commercial vehicle insurance will protect you and your car when travelling for work or transporting goods or employees.
There is also tool cover, business insurance, life insurance, credit insurance, etc. Whether you need these depends on the type of business, where you run it from, and what it does.
Can you get income protection if you are self-employed?
Yes, you can, and you should. Life is very unpredictable, and if you have your own business, you want to ensure that you are protected in every way should anything happen.
If you are ill or get injured, income protection covers you while you cannot work. You will get a payout of your monthly income – it is generally tax-free, and you will be paid until you are better.
Sole traders do not receive sick pay, so income protection will help you cover all of your general costs such as rent, expenses, medical costs, and more while you are unable to work for a salary. You may go into a lot of debt without this cover if your illness lasts a long time.
Do I need employers liability insurance if I am self-employed?
You will undoubtedly need employers’ liability insurance, even if you have just one employee. You will legally require a level of £5 million for this insurance.
Any claims made by your employees will be covered if you are insured. The cost of it depends on the size and type of your business. You may also need professional indemnity insurance along with it.
It is not a legal requirement if you are a family business, public organisation, health service, or sole-employee business (this depends on various circumstances). Many insurance providers offer this type of cover, so it’s best to shop around.
Can a sole trader get indemnity insurance?
Yes, you can.
This insurance will protect you from any claims or legal actions you may face for compensation. This insurance is vital for handling clients’ sensitive data and giving them professional services or advice. This insurance covers all legal costs for settling or defending a claim or correcting a mistake.
This insurance aids in situations that may bring reputable damage or financial loss. This covers professional negligence, breach of confidence, defamation, damaged or lost documents, and more.
Do sole traders need directors’ and officers’ insurance?
In all honesty, no, you don’t. You should instead opt for legal expenses insurance. You are already paying enough from public liability insurance cover to income protection, and directors’ and officers’ insurance will only add extra expenses.
This insurance is not compulsory, but you can get it if it makes you feel more comfortable.
This type of business insurance covers the personal assets of officers or directors if they get sued, and it will cover any legal fees and costs.