Public Liability Insurance For The Self Employed

Going self employed can feel a bit daunting at first - you will need to take personal responsibility for a lot of things that an employer would automatically take care of, and one of those is personal liability insurance for the self employed. Every expense adds up and you might be wondering whether this is something that you need, but in most cases having public liability insurance is a great idea.

a woman working from a laptop, perhaps from a coffee shop

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What is public liability insurance?

This is a type of insurance which businesses of all sizes might need, and covers a variety of industries. It provides cover if a client or member of the public claims that they have suffered an injury or suffered property damage because of the actions / inactions of your business, usually due to negligence. You can buy a policy to protect your house and family from any liability claims that might arise from work-related incidents.

Why do the self employed need public liability insurance?

If you are self employed having public liability insurance isn't a legal requirement, but it is highly recommended that you have some. A few pounds a month is all it costs for a big security net in case the worst happens.

Your insurance policy will cover you for the legal expenses surrounding the claim and will also cover the compensation if required. The costs of a claim like this against your business could be financially crippling otherwise, especially if you operate as a sole trader. Some clients and businesses won't work with you if you don't have public liability cover so ensuring that you have it can open up opportunities for new business and contracts too.

The self-employed are often in need of public liability insurance, as they may be unable to obtain it through their employer. There are a number of benefits to being self-employed, but there are also a number of disadvantages. One disadvantage is that the self-employed do not have as much access to benefits like public liability insurance.

Is public liability insurance a tax deductible expense?

Yes it is in the UK, so make sure that you include it in your list of expenses and on your tax return. It is highly recommended if you are unfamiliar with being self-employed and completing a tax return that you get professional help with it. What can be deducted as expenses are different in every industry and it is likely that the money you spend on having someone do your tax return for you will be recouped in tax savings.

For example, if you are a tradesman or CIS subcontractor due a CIS reclaim having a professional sort and submit your tax return will ensure that you make the most of any allowances due.

two construction workers wearing high visibility vests and hard top hats overlooking a huge building project

Photo by Joe Holland on Unsplash

What self employed jobs need public liability insurance?

It would be a benefit in pretty much any type of job, but especially if you are a sole trader as the risks are so high. Generally if you are a hairdresser, retailer, restaurant or cafe owner, builder or event organiser you would definitely benefit from taking out a policy. Even if you work from home, if you have clients to your house or you do any work tasks outside your home, you are opening yourself up to liability.

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