Insurance for Self Employed UK: Every Policy You Need

Q: Is insurance legally required for self employed people in the UK?

The only insurance legally required for self-employed people is employers' liability insurance, and only if you employ staff including part-time workers or labour-only subcontractors. Other types such as public liability and professional indemnity are not legally required but are often contractually required by clients.

Q: Can I claim self-employed insurance as a tax expense?

Limited company directors can usually claim business insurance premiums such as public liability, professional indemnity, and employers' liability as allowable expenses. However, private medical insurance may be treated as a taxable benefit. For sole traders, many insurance costs are considered personal expenses, so it is important to check with an accountant.

Q: What is the difference between public liability and professional indemnity?

Public liability insurance covers injury or property damage to third parties caused by your business activities. Professional indemnity insurance covers financial losses claimed by clients due to mistakes, advice, or services provided by your business. Many self-employed professionals require both types of cover.

Q: Do I need income protection insurance if I'm self employed?

Yes, it is strongly recommended. Self-employed individuals are not entitled to Statutory Sick Pay, and government support such as Employment and Support Allowance is limited. Income protection insurance replaces a portion of your income if you are unable to work due to illness or injury.

Q: Is private health insurance worth it for the self employed?

Private health insurance can be valuable for self-employed individuals because it reduces waiting times for treatment and helps you return to work faster. This can minimise lost income during illness, making it a practical investment alongside NHS coverage.

Q: What happens if I work from home — do I need different insurance?

Working from home can change your insurance needs. Standard home insurance may not cover business equipment or liability related to business visitors. You should inform your insurer and consider adding public liability and business equipment cover if you run your business from home.

Q: Can I get cheap self employed insurance by bundling policies?

Yes, bundling policies through a broker or insurer can often reduce costs. Many providers offer discounts when you combine multiple policies such as liability, income protection, and health insurance. Comparing quotes before purchasing is essential to find the best deal.

Q: How do I choose between moratorium and full medical underwriting for private health insurance?

Moratorium underwriting does not require upfront medical disclosure but excludes recent conditions for a set period. Full medical underwriting requires detailed health information and provides clear coverage terms from the start. Choose based on your health history and preference for certainty.

Q: What is the minimum self employed insurance I should have?

At minimum, consider public liability insurance if you interact with clients, and income protection insurance to cover your earnings if you cannot work. Add professional indemnity if you provide advice or services, and employers' liability if you employ staff.

Q: Do I need employers' liability insurance as a sole trader if I use subcontractors?

You may need employers' liability insurance if your subcontractors are classified as labour-only and you control their work. Genuine independent subcontractors typically do not require this cover. If unsure, seek advice from a qualified broker or official guidance.

When James, a freelance electrician from Bristol, accidentally damaged a client’s kitchen ceiling during a rewire, the repair bill came to £4,300. He didn’t have public liability insurance. He paid out of his own pocket. It wiped out two months of profit. Six weeks later, he was covered — for £6.40/month.

Insurance for self employed workers in the UK is not a one-size-fits-all purchase. You need different types of cover depending on whether you’re a tradesperson, consultant, creative freelancer, or limited company director. Some of it is legally required. Most of it isn’t — but without it, a single claim or illness could end your business.

This guide covers every type of insurance relevant to the self employed in the UK in 2026: what each one does, what it costs, who needs it, and which providers offer the best value. The 4.33 million self employed people in the UK have no employer to fall back on. Your insurance is your safety net.

Table of Contents

What Insurance Do Self Employed People Need in the UK?

The most important insurances for self employed people in the UK are: public liability insurance (required by many clients and contracts), professional indemnity insurance (essential for advisers, consultants, designers), income protection insurance (replaces your income if you’re too ill to work), and private health insurance (bypasses NHS waiting lists). Public liability starts from around £5.64/month. None of these are legally mandatory for sole traders — but each protects against a different existential risk.

Insurance for Self Employed UK

Policy Type	What It Covers	Legally Required?	Typical Monthly Cost
Public Liability	Injury to a third party or damage to their property caused by your work	No (but often required by clients)	From £5.64/month
Professional Indemnity	Claims from clients for advice/errors that cost them money	No (but required by many professions)	From £10–£30/month
Employers’ Liability	Injury/illness claims from any staff or subcontractors you hire	Yes, if you employ anyone	From £60–£120/month
Income Protection	Replaces 50–70% of your income if you cannot work due to illness/injury	No	From £15–£40/month
Private Health Insurance	Fast-tracks treatment, bypasses NHS waiting lists	No	From £35–£80/month
Life Insurance	Lump sum payout to dependants if you die	No	From £10–£30/month
Business Equipment/Tools	Repair or replacement of tools, laptops, specialist kit	No	From £5–£20/month
Cyber Insurance	Data breach liability and recovery costs	No (recommended for data handlers)	From £10–£25/month

What Is Self Employed Insurance?

Self-employed insurance is not a single product — it’s a collection of policies that together protect you, your business, your clients, and your income from the specific risks you face working for yourself. Unlike employed workers who benefit from employers’ liability cover, workplace health schemes, and statutory sick pay, you are entirely responsible for your own protection.

Think of it like a toolbox. Each type of insurance is a different tool — you don’t always need every tool in the box, but the ones you do need, you really need. A consultant who gives bad advice can face a professional indemnity claim worth tens of thousands. A builder without public liability insurance can be personally liable for injuries on a client’s property.

In the UK, the FCA regulates insurance products and the Health and Safety Executive (HSE) mandates employers’ liability for businesses with staff. Most other types of self employed insurance are voluntary — but skipping them carries serious financial risk.

8 Types of Insurance Every Self Employed Person Should Know About

1. Public Liability Insurance

Public liability (PL) covers you if your business activity injures a third party or damages their property. If a client trips over your cable and breaks their wrist, or you spill a drink on their laptop, PL pays the legal and compensation costs.

Who needs it: Any sole trader or freelancer who works at client premises, has clients visit their workspace, or works in public spaces. Tradespeople, consultants, photographers, personal trainers, therapists, market traders — almost everyone.

Cost: From £5.64/month for up to £2 million cover (Simply Business, 2026 pricing). Cover typically ranges from £1 million to £10 million.

Best providers: Simply Business, Hiscox, AXA. Simply Business compares quotes across multiple insurers for trades and freelancers.

2. Professional Indemnity Insurance

Professional indemnity (PI) protects you against claims that your professional advice, design, or service caused a client financial loss. Even if the claim is baseless, legal defence costs alone can reach £50,000+.

Who needs it: Consultants, accountants, architects, IT professionals, marketers, designers, solicitors, financial advisers, and anyone who provides advice or a professional service. Many professional bodies require PI as a condition of membership.

Cost: From £10–£30/month for lower cover amounts. Higher-risk professions (legal, financial, medical) pay more.

Best providers: Hiscox, Simply Business, AXA. Hiscox is particularly strong for tech and creative freelancers.

3. Employers’ Liability Insurance

Employers’ liability (EL) is legally mandatory under the Employers’ Liability (Compulsory Insurance) Act 1969 if you employ anyone — including part-time staff, temporary workers, and in some cases subcontractors. You must hold at least £5 million of cover. The fine for non-compliance is up to £2,500/day.

Who needs it: Any self employed person who hires staff, uses regular subcontractors, or has apprentices. If you work entirely alone, you don’t need it.

Cost: From £60–£120/month depending on the number of employees and the nature of the work.

4. Income Protection Insurance

Income protection is the most underused and most important insurance for self employed people. If you cannot work due to illness or injury, this policy pays you a monthly income — typically 50–70% of your pre-illness earnings — until you recover, retire, or the policy term ends.

Why it matters: As a sole trader or freelancer, you have no statutory sick pay (SSP). If you’re off for 6 months with a serious illness, your income drops to zero. Income protection bridges that gap.

Who needs it: Every self employed person with financial commitments — mortgage, rent, dependants, business overheads.

Cost: From £15–£40/month depending on your age, income level, occupation, and chosen deferral period (how long before payments begin — typically 4, 8, 13, or 26 weeks).

Best providers: Royal London, Aviva, Legal & General, The Exeter. The Exeter specialises in policies for the self employed with flexible self employed income definitions.

⚠️ WARNING: The Self Employed’s Biggest Protection Gap

Research from Opinium found that 13% of self-employed people have no life insurance, PMI, critical illness cover, or income protection at all. The HMRC does not provide meaningful sick pay for self-employed workers — Employment and Support Allowance (ESA) pays just £84.80/week (2026), which is not enough to cover most household expenses, let alone business costs. Income protection is not optional for the self employed. It is essential.

5. Private Health Insurance (PMI)

Private medical insurance (PMI) gives you access to private healthcare — faster diagnosis, specialist appointments, and treatment — bypassing NHS waiting lists that can run 6–18 months for non-emergency procedures. For the self employed, time off sick is lost income.

Who needs it: Any self employed person who cannot afford to be off work for months waiting for NHS treatment. Particularly important for those with no sick pay, no partner’s income, and tight business margins.

Cost: AXA Health quotes from £50.02/month for a 35-year-old in Guildford with standard cover (moratorium underwriting, October 2025). Aviva reports 25% of customers aged 35–50 paid under £46.53/month in Q3 2025.

Best providers: Bupa (Bupa By You Comprehensive), Aviva (Healthier Solutions), AXA Health (Personal Health), Vitality (Personal Healthcare), The Exeter (Health+). All five are Defaqto 5-star rated.

Tax note: As a sole trader, PMI premiums are typically a personal expense (not tax-deductible). If you operate as a limited company, your company can pay for PMI as a business expense — but this becomes a taxable benefit-in-kind for you personally. Consult your accountant.

6. Life Insurance

Life insurance pays a lump sum to your dependants if you die. As a self-employed person with no employer death-in-service benefit, you need to arrange this yourself if you have a partner, children, or a mortgage.

Cost: From £10–£20/month for a healthy non-smoker in their 30s with £200,000 of term cover over 20 years. Premiums are fixed for the term.

Best providers: Legal & General, Aviva, Royal London. For self-employed with variable income, Royal London’s Reviewable term policies are worth considering.

7. Business Equipment and Tools Insurance

If your tools, laptop, cameras, or specialist equipment are damaged, stolen, or lost, this policy pays for repair or replacement. Standard home contents insurance rarely covers business equipment.

Who needs it: Tradespeople, photographers, musicians, IT contractors — anyone whose business depends on physical equipment.

Cost: From £5–£20/month depending on the value and nature of equipment.

8. Cyber Liability Insurance

If you handle client data and suffer a data breach, cyber liability insurance covers regulatory fines, legal costs, and client notification expenses. Since GDPR came into force, the Information Commissioner’s Office (ICO) can fine businesses up to £17.5 million or 4% of global turnover for data breaches.

Who needs it: Freelancers handling sensitive client data, IT contractors, marketing consultants, accountants, and anyone who stores personal data.

Cost: From £10–£25/month for basic cyber cover.

Types of Self Employed Insurance Compared

Policy	Covers	Does NOT Cover	Best Provider (UK)
Public Liability	Third-party injury/property damage	Your own injury or equipment	Simply Business, Hiscox
Professional Indemnity	Client claims for advice errors or negligence	Deliberate wrongdoing	Hiscox, AXA
Employers’ Liability (legal req.)	Employee/subcontractor injury claims	Your own personal injury	AXA, Aviva
Income Protection	Monthly income if too ill/injured to work	Unemployment (redundancy)	The Exeter, Royal London
Private Health Insurance	Fast private treatment for acute conditions	Pre-existing conditions (initially), chronic conditions	Bupa, Aviva, AXA Health
Life Insurance	Lump sum for dependants on your death	Illness or disability	Legal & General, Aviva
Business Equipment	Repair/replacement of tools and kit	Vehicle accidents (need separate cover)	Simply Business, Hiscox
Cyber Insurance	Data breach costs and ICO regulatory exposure	Physical damage to IT systems	Hiscox, AXA

4 Real-Life Scenarios: Getting the Right Cover

Scenario 1: Tom, 31, Freelance Web Developer, London

Risks: Tom gives clients code and design advice. If something goes wrong with a website — say, a security flaw loses a client’s customer data — Tom could face a claim of £30,000+. He also has a mortgage and no sick pay.

What he needs: Professional indemnity (£1 million cover, £12/month with Hiscox), income protection (4-week deferral, £22/month with Aviva), and a small public liability policy (£6/month). Total: ~£40/month.

Verdict: PI is non-negotiable for any freelancer providing professional services. Income protection is equally essential — Tom cannot survive 3 months off work without income.

Scenario 2: Sandra, 44, Self Employed Plumber, Manchester

Risks: Sandra works at client premises daily. She has one employed apprentice and uses specialist tools worth £8,000. An accidental flood at a client’s property could cost £20,000.

What she needs: Public liability (£2 million, £8/month), employers’ liability (legally required, £75/month), tools insurance (£12/month), income protection (£30/month). Total: ~£125/month.

Verdict: Employers’ liability is not optional once Sandra hired her apprentice. Without it, she risks £2,500/day fines from the HSE. Tools insurance is cheap protection for her most valuable business assets.

Scenario 3: Priya, 38, Independent Marketing Consultant, Edinburgh

Risks: Priya advises FMCG brands on digital campaigns. A campaign she recommended underperformed badly — the client claimed Priya’s advice caused £45,000 in wasted spend. Priya also has two young children and a mortgage.

What she needs: Professional indemnity (£1 million, £18/month with AXA), life insurance (£250,000 level term, £13/month with Legal & General), income protection (£25/month), and private health insurance (£52/month with Bupa). Total: ~£108/month.

Verdict: Priya’s key risk is a PI claim. But given her family situation, income protection and life insurance are equally critical — if she’s ill for 6 months, her family’s mortgage is at risk. PMI ensures she gets treated and back to work quickly, rather than waiting months for NHS referrals.

Scenario 4: Derek, 55, Sole Trader Accountant, Bristol

Risks: Derek handles client tax returns. A filing error that resulted in a £20,000 HMRC penalty for a client led to a professional negligence claim. Derek is also a sole earner with a health condition that means he monitors his health closely.

What he needs: Professional indemnity (£500k, £22/month — often required by ICAEW/AAT membership), private health insurance (£65/month with Vitality — good for monitoring chronic conditions), income protection (£35/month with The Exeter — excellent for over-50s self-employed). Total: ~£122/month.

Verdict: Accountants are in a high-risk category for PI claims. The Exeter’s income protection is particularly well-suited to self-employed people over 50, using a more favourable definition of self-employed income for claims assessment.

Pros and Cons of Self Employed Insurance

Pros	Cons
Protects against existential financial risks — one PL claim can wipe out years of savings	Not all policies are tax-deductible for sole traders — consult an accountant
Income protection fills the SSP gap that employed workers have by default	Premiums add up — a full suite of cover can cost £80–£150/month
PI insurance is often a prerequisite to winning contracts with larger clients	Pre-existing health conditions can affect income protection and PMI pricing
Private health insurance keeps you working — delays in treatment mean lost income	Some policies have complex exclusions that only become clear at claim time
Bundling policies with one provider (e.g. Simply Business, Hiscox) can reduce admin	Over-insuring is possible — assess your actual risk exposure before buying
FCA regulation means all policies must meet minimum standards of fairness	Employers’ liability premiums rise significantly with headcount and risk level

5 Mistakes Self Employed People Make With Insurance

Assuming home insurance covers business equipment.

Most home insurance policies explicitly exclude business equipment or limit cover to £1,000–£2,000. If your laptop, camera, or tools are used for business, check your home policy — and get separate business equipment cover if they’re not fully covered.

⚠️ WARNING

Working without public liability insurance when a client or contract requires it can immediately void that contract. Many local authority and commercial contracts, as well as platforms like TaskRabbit and Bark.com, require proof of PL cover before work begins. Always check your contracts.

Not getting income protection because you feel healthy.

The most common reason to claim income protection is not a dramatic accident — it’s back problems, mental health conditions, and cancer. These are statistical realities. A healthy 38-year-old has a 1-in-3 chance of suffering a long-term illness before retirement age. Income protection is cheap insurance against the most common risk, not an edge case.

Buying public liability only and ignoring professional indemnity.

PL and PI cover different risks. PL covers accidental physical damage. PI covers financial loss from your advice or work quality. A consultant or designer needs PI far more than PL — but many skip it because they don’t work in physical environments.

Not disclosing your self-employed status on existing policies.

If you work from home and haven’t told your home insurer you also run a business from that address, your claim for a business-related incident could be declined. Always declare your self-employed status and any business visitors to your home insurer.

Skipping employers’ liability once you start using subcontractors.

Many sole traders assume EL only applies to full-time employees. But under the Employers’ Liability (Compulsory Insurance) Act 1969, the requirement can extend to labour-only subcontractors and some casual workers. If in doubt, check with an FCA-regulated insurance broker.

How Much Does Insurance for Self Employed UK Cost?

Policy	Minimum Cost	Mid-Range Cost	Notes
Public Liability (£2m)	£5.64/month	£10–£20/month	Higher-risk trades cost more
Professional Indemnity (£250k)	£10/month	£18–£35/month	Higher cover or higher-risk profession increases cost
Employers’ Liability	£60/month	£80–£150/month	Legal minimum; cost rises with employee count
Income Protection (50% income)	£15/month	£25–£50/month	Age, health, occupation, and deferral period affect price
Private Health Insurance (basic)	£35/month	£50–£90/month	Age and location are key cost drivers
Life Insurance (£200k term)	£10/month	£15–£30/month	Non-smokers in good health pay least
Business Equipment (£5k cover)	£5/month	£10–£20/month	Value and type of equipment determine premium
Full Suite (PL+PI+IP+PMI)	~£75/month	£110–£180/month	Bundling with one provider may offer discounts

Best Providers for Self Employed Insurance UK (2026)

1. Simply Business — Best for Business Insurance Bundles

Why: Trusted by over 594,000 SMEs. Compares PL, PI, tools, and business equipment quotes from multiple insurers in under 7 minutes. Feefo-rated 9/10. Operates as a broker for a wide range of UK insurers including AXA, Churchill, and Hiscox.

Best for: Tradespeople, freelancers, and sole traders who want to bundle business insurance policies at competitive rates.

2. Hiscox — Best for Professional Indemnity

Why: Hiscox is the UK’s most recognised specialist PI insurer. Particularly strong for IT professionals, consultants, media and creative freelancers. Flexible policy limits and good online quote process. FCA-regulated.

Best for: Consultants, designers, developers, and advisers who need professional indemnity as their primary cover.

3. The Exeter — Best for Income Protection (Self Employed)

Why: The Exeter uses a self-employed-friendly definition of ‘unable to work’ that accounts for variable income — fairer than many competitors who base payouts on employed-person income definitions. Their Health+ PMI policy is Defaqto 5-star rated. Trustpilot 4.5/5.

Best for: Self-employed people who need income protection tailored to the reality of irregular earnings.

4. Bupa — Best for Private Health Insurance

Why: Bupa is the UK’s most trusted private health brand. Their ‘Bupa By You Comprehensive’ policy covers hospital treatment, mental health, cancer, and offers 24/7 virtual GP. Self-employed individuals apply as personal cover (not group/employer scheme). FCA-authorised.

Best for: Self-employed professionals who want a well-known brand with broad hospital access and strong mental health cover.

5. Aviva — Best for Combined Coverage

Why: Aviva offers life insurance, income protection, and private health insurance as a combined package, with multi-product discounts. Their Healthier Solutions PMI is Defaqto 5-star rated. Over 1.2 million people have health insurance with Aviva (2025). 98.2% life insurance claim acceptance rate.

Best for: Self-employed people who want to consolidate multiple types of cover — life, health, income protection — with one provider and benefit from loyalty pricing.

Frequently Asked Questions Insurance for Self Employed UK

Is insurance legally required for self employed people in the UK?

The only type of insurance legally required for sole traders and self-employed businesses is employers’ liability insurance — and only if you employ any staff, including part-time workers, temps, or labour-only subcontractors. Public liability, professional indemnity, income protection, and all other types are legally voluntary. However, many clients and contracts specifically require PL or PI as a condition of working.

Can I claim self-employed insurance as a tax expense?

For limited company directors, business insurance premiums (PL, PI, EL, business equipment) can generally be claimed as a business expense, reducing your corporation tax bill. However, private medical insurance paid by a limited company becomes a taxable benefit-in-kind for the director. For sole traders, most insurance premiums are classed as personal expenses rather than allowable business costs — consult your accountant before claiming.

What is the difference between public liability and professional indemnity?

Public liability covers accidental physical damage to third parties or their property caused by your business activity — for example, damaging a client’s carpet. Professional indemnity covers financial losses claimed by a client due to your advice, design, or service going wrong — for example, a consultant’s strategy that cost a client money. Many self-employed people need both, but the emphasis depends on your trade.

Do I need income protection insurance if I’m self employed?

We recommend it strongly. Self-employed workers are not entitled to Statutory Sick Pay. If you’re too ill to work, Employment and Support Allowance (ESA) pays approximately £84.80/week (2026 rate) — not enough to cover most households. Income protection replaces 50–70% of your earnings from a set deferral period (typically 4–26 weeks after you stop working) until you recover or retire.

Is private health insurance worth it for the self employed?

For the self-employed, time is money — and NHS waiting times for non-urgent treatment can run 6–18 months. Private health insurance gets you seen faster, back to work faster, and avoids the lost income of a prolonged illness. At £35–£70/month for a healthy person in their 30s, it is affordable relative to the risk. The NHS still covers accidents, emergencies, and most of your GP and prescriptions.

What happens if I work from home — do I need different insurance?

Working from home changes your insurance requirements in several ways. Your standard home contents insurance likely excludes business equipment and business visitor liability. You should notify your home insurer you work from home. If clients visit your home for business purposes, public liability insurance is essential. Business equipment insurance covers your work tools and tech even if used at home.

Can I get cheap self employed insurance by bundling policies?

Yes — comparing quotes via a broker like Simply Business or Hiscox often produces better rates than buying policies individually from each insurer. Aviva also offers multi-product discounts when you hold life insurance, income protection, and PMI together. Always compare before renewing — self employed insurance is a competitive market and premiums vary significantly between providers.

How do I choose between moratorium and full medical underwriting for private health insurance?

Moratorium underwriting is faster — you don’t need to disclose your medical history upfront, but conditions you’ve had in the last 5 years are automatically excluded for 2 years. Full medical underwriting (FMU) requires a detailed health questionnaire, but gives you a clear written list of what is and isn’t covered from day one. If you’re in good health with no recent conditions, moratorium is simpler. If you have a complex health history and want certainty, choose FMU.

What is the minimum self employed insurance I should have?

At an absolute minimum: public liability insurance (if you interact with the public or work on client premises) and income protection insurance (to replace your earnings if you cannot work). If you give professional advice, add professional indemnity. If you employ anyone, employers’ liability is legally mandatory. These three or four policies together can cost as little as £50–£80/month and protect you from the most serious risks.

Do I need employers’ liability insurance as a sole trader if I use subcontractors?

Possibly. Under the Employers’ Liability (Compulsory Insurance) Act 1969, the requirement extends to ‘labour-only’ subcontractors in some cases — particularly if you control how and when they work. If you use genuine independent subcontractors (who supply their own tools, set their own hours, and take financial risk), EL is usually not required. If you’re unsure, get advice from an FCA-regulated broker or the HSE website.

Key Takeaways

Insurance for self-employed UK covers 8 main policy types — the most essential are public liability, professional indemnity, income protection, and private health insurance.
Employers’ liability is the only legally mandatory insurance — required whenever you employ anyone, including subcontractors in some cases.
Income protection is the most underused essential policy for self-employed people: without SSP, a 3-month illness can devastate your finances.
AXA Health covers a 35-year-old self-employed professional from £50/month. Simply Business provides public liability from £5.64/month.
As a sole trader, most insurance premiums are personal expenses (not tax-deductible). Limited company directors have more options — always consult an accountant.
Moratorium underwriting gives faster PMI setup; full medical underwriting gives day-one clarity on what’s covered. Choose based on your health history.
Bundling policies with one provider (Aviva, Hiscox, Simply Business) can save 10–20% vs buying each separately.

To understand your private health insurance options in detail, see our guide to cheap private health insurance UK no waiting period. For income replacement in depth, read our income protection insurance for self employed UK guide.

📋 Disclaimer

This article is for informational purposes only. Always consult a licensed insurance professional before making coverage decisions. TrustMyPolicy.com does not sell insurance products or represent any insurer.