Insurances for Self-Employed: Protect Yourself Against Risks!

What Risks Does Your Business Hold?

Identify potential risks before you start your self-employment. It is best to ensure you have adequate coverage in advance - because underinsurance can mean the end of your financial existence, especially at the beginning of your self-employment. The following questions can help:

• What risks does your activity hold?
• How likely is it that these risks will materialise?
• What are the financial consequences if these risks materialise?

Coverage of Private Risks

If you are self-employed, you are also exposed to certain risks as a private individual. In some cases, the law requires you to take out coverage, in others, insurance is recommended (depending on your activity).

Illness and Incapacity for Work

Generally, it is a legal requirement to take out health and long-term care insurance. Some countries differentiate between private and statutory coverage. Make your decision carefully - switching afterwards is usually complicated.

Loss of income and illness are a real risk for the self-employed. You can build up reserves for this. Or you make sure that you have sick pay available in this case to cushion financial losses. Ask your health insurance company about the requirements.

In case you are no longer able to work at all, you can take out a policy that provides financial support if you are unable to work due to illness or injury. Make sure you enquire carefully about the scope of benefits! Often you will only receive financial support if you are no longer able to work. If you are ‘only’ partially unable to work, the insurer may require you to reorganise your business.

Accident, Pension, Unemployment

You should also consider accident, pension and (voluntary) unemployment insurance.

Most self-employed people have to take care of their pension provision themselves. Depending on the country in which you work, you can also make voluntary contributions to the statutory pension scheme.

Coverage against unemployment is also possible on a voluntary basis in some countries. However, the self-employed often have no choice but to build up reserves to bridge periods without work if their business fails.

You should also consider covering yourself against accidents - especially if you have a job with a higher accident risk.

Coverage of Business Risks

Every business is subject to risks, which can vary depending on the activity. However, there are basic risks that all self-employed people have to deal with. The following commercial insurance policies are important for your business:

• General Liability Insurance
  If third parties suffer damage as a result of your activities, this insurance will step in. It covers personal injury, property damage and resulting financial losses.
• Financial Loss Insurance
  If you cause direct financial loss to a third party, you can be held liable. In such cases, financial loss insurance protects you from suffering economic loss.
• Additional Add-on for First-Party Cyber and Data Risks Insurance (FPC)
  The threat of cyber attacks is increasing every year. Our Additional Add-on for First-Party Cyber and Data Risks Insurance (FPC) is a sensible investment to protect your business in the event of hacking.
• Another useful insurance can be: legal expenses insurance, commercial property insurance

Professional Indemnity Insurance through exali combines the benefits of General Liability and Financial Loss Insurance.

Insurance for Self-Employed: Make Sure to Check Regularly

Even if you have taken out suitable insurance coverage, you should regularly check whether your insurances are still necessary. You may have expanded your activities and need to extend your coverage or adjust the sums insured. You should also regularly reassess your risk situation. If there are any changes, inform your insurance company as soon as possible. It is always worth comparing the benefits of different insurance policies - this will ensure you have the best coverage and can also save money.