6 essential types of insurance for self-employed workers

6 essential types of insurance for self-employed workers

Karen Solomon
By Karen Solomon
Jul 31, 2023
1 min read

If you’re self-employed, being financially prepared for unexpected events is one of the best ways to be confident that your business will survive — no matter what happens.

A worst-case scenario for any entrepreneur is tanking your business with legal fees after a random accident or disagreement you didn’t anticipate.

Self-employed business insurance choices can be confusing so we put together a helpful guide that breaks down the five essential types of self-employed business insurance.

Jump ahead to learn more about:

How to find affordable insurance for the self-employed

These tips can help you get the right business insurance for the self-employed — at the right price:

  • Compare your coverage. Just like with personal insurance, check your business insurance policies regularly to help save money. Gather quotes at least once a year. Be sure to compare apples to apples when it comes to premiums and deductibles.
  • Get recommendations. Check with friends, family and other business owners for recommendations on specific insurers. Talk with suppliers and other companies in the same line of work for recommendations. Read online reviews of insurance companies you’re considering.
  • Check with industry groups. If you belong to a professional organization, industry group or your local Chamber of Commerce, ask them about insurance partners who may offer local businesses a discount.
  • Do your research. While cheap insurance may seem like a good idea, a policy is no longer a bargain if you can’t get the right coverage, reach someone on the phone or successfully file a claim. Research the insurers you are considering to make sure they’re financially sound and have good reviews for customer service.

The 6 most common self-employed business insurance types

Self-employed business insurance typically includes:

1. General liability insurance

General liability insurance is the first type of business insurance many self-employed business owners buy.

While sometimes called “slip and fall insurance,” general liability usually covers situations if your business is found responsible for an accident that injured someone or damaged property that doesn’t belong to you.

In some professions, you can’t get hired or start jobs without providing a certificate of insurance that proves you have active general liability coverage for your business.

2. Commercial property insurance

Commercial property insurance covers most of the physical things you need to do business — such as your equipment, furniture, inventory and the building structure that you own.

When you have property insurance, you may be able to get help replacing your stuff or repairing your damaged building after a covered event, such as a burst water pipe, fire or vandalism.

3. Business owner’s policy (BOP) insurance

A business owner’s policy, also called a BOP insurance policy, combines all of the coverage of both general liability and commercial property insurance into a single, more efficient and comprehensive package.

The beauty of a BOP is that it can carry more protection than just a single policy. It can help cover damage that you or your employees may inadvertently cause to another person’s property, as well as bodily injury accidents that injure patrons or passersby to your business.

BOP keeps going to help protect your business inventory in the event of a fire or water damage or other covered event.

And its arms reach out to cover business income interruptions; advertising injury if you’re accused of infringing someone else’s copyright in your advertising, libel, or slander; and can provide a legal defense if you are sued. In short, a BOP can do a lot.

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4. Workers’ compensation insurance

A lot of people think that you only need workers’ compensation insurance if you have employees.

The reality is, workers’ comp can also cover your medical expenses and lost wages if you are self-employed with no employees. Just make sure you have business owner’s coverage with your policy.

Most states require this coverage as soon as you hire your first employee, so it’s important to know the rules where you work.

5. Commercial auto insurance

If you’re driving for business beyond the occasional coffee run, you might not be covered by your personal auto policy in the event of an accident.

Commercial auto insurance can help cover expenses if you have a collision or accident while driving to meet clients, drop off equipment, make deliveries and a variety of other tasks you might be doing behind the wheel during your workday.

6. Errors and omissions insurance (E&O insurance)

You’ve probably heard horror stories of an unruly customer who turns a minor disagreement into a full-blown legal battle. It can happen in almost every industry.

If you’re accused of making a professional mistake or being negligent, errors and omissions insurance may help cover the costs of defense if you are sued. In some industries, E&O coverage is known as professional liability insurance.

Depending on your industry, E&O or professional liability coverage might be included with your general liability policy.

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How NEXT helps protect self-employed small business owners

We make small business insurance simple, affordable and easy so you can understand your options and get the coverage you need in less than 10 minutes.

Simply answer a few questions to get an online instant quote on an insurance package customized for your business.

If you have any questions, our licensed U.S. insurance advisors are ready to help.

Start a free business insurance quote with NEXT today.

Karen Solomon
About the author
Karen Solomon is a Senior Content Marketing Editor for NEXT. Her writing and editing has been serving small business owners and startups for several years.
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** Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim.

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