Self-employed and Sole Trader Insurance

Why do I need business insurance when I’m self-employed or a sole trader?

Business insurance is important for all businesses - self-employed, sole trader, or otherwise. It protects you from third-party claims and but covering any fees for defending yourself against a claim, or paying out any compensation due if you’re found to be at fault.

Different occupations have different risks associated with them. For example, let’s take a builder whose client gets injured while they’re carrying out some repairs for them. Or a consultant who’s advice has caused a client to lose money. Or maybe a baker who’s newest recipe has made several customers sick?

In all of these cases, business insurance will protect the business owner from having to be out of pocket to pay out on a claim.

Additionally, some clients might require you to have certain covers in place before you can complete work for them. Most local authorities (councils, government bodies etc) are likely to request you have, at minimum, public liability insurance.

Public liability, Professional indemnity and Contents insurance are not legal requirements for UK businesses. However, you may find that some contracts (such as local authorities) require you to have public liability cover to work with them.

If you have anyone working for you – in any capacity and for any length of time - then Employers’ liability insurance is a legal requirement.

Additional covers for the self-employed and sole traders

What factors might affect the cost of premiums for sole traders?

There are several factors for people to consider when it comes to the cost of a policy. For example:

• What is your occupation? – Are you a tradesperson, and if so, does your trades have a higher risk profile? Or are you a professional who spends the majority of your time working from an office?
• Where you work – Are you working from a premises? From home? Do you visit customers or clients?
• Do you have tools or equipment that need protecting? – Will your work be seriously impeded if your tools get stolen, or your laptop breaks down?
• Do you have employees? – Are you making sure you have cover in place to protect them?

All these things play a factor in the cover you choose and, ultimately, the price you’ll pay.

What self-employed occupations do AXA cover?

We cover a long list of occupations - here are just a few of the occupations we cover that are popular with self-employed customers.

• Builders
• Hairdressers
• Cleaners
• Couriers
• Gardener

You can see a more thorough list of some of the main occupations we cover with our handy occupation A-Z search.

Frequently asked questions

What’s the difference between public liability insurance and professional indemnity insurance?

The main difference between public liability and professional indemnity is the TYPE of situation you're covered for.

If you want to learn more about the difference between professional indemnity and public liability insurance why not check out our hand guide: Professional Indemnity or Public Liability Insurance?

What’s the difference between being self-employed and being a sole trader?

These two terms are often used interchangeably as they broadly mean the same thing.

The difference between being described as either self-employed or a sole trader is simply how your business is structured.

Do sole traders require any additional insurance?

No, sole traders require the same covers as most other businesses. Being a sole trader simply describes the structure of your business, rather than any business activities that will affect the types of cover you need.

¹Professional indemnity cover is only available to certain trades

*10% of our customers paid this or less between October and December 2024.

**10% of our customers paid from £7.00 for ten months between October and December 2024 after an initial deposit. Interest applicable. For more details see our terms & conditions.