Language 
Health insurance for self-employed: All you need to know
Protect your business by learning which types of insurance for self-employed individuals are most important based on your line of work.
Being self-employed means managing clients, invoices, and projects, but it also comes with risks that can affect your business and income. That’s why insurance for self-employed professionals can help protect you if a client makes a claim, you have a workplace accident, or your work tools are stolen.
In this guide, we’ll look at the different types of insurance available for self-employed professionals, the main risks of working as a freelancer, what to look for when choosing a policy, and the most common mistakes to avoid.
Risks of working as a self-employed person
Working for yourself gives you the freedom and flexibility to run your business your way, but it also comes with risks that can affect your work and your income. Some of the most common include:
- Damage to third parties: Unintentionally causing financial or property damage to a customer, who then files a claim for compensation against you.
- Illnesses or accidents: Taking time off work due to illness or injury can have a major financial impact, leading to lost income, missed clients, and delayed projects.
- Equipment breakdowns or damage: Any damage to your work equipment caused by breakdowns, fires, or floods can bring your business to a standstill for several days.
- Legal risks: Customer complaints, disputes with suppliers, or breaches of contract that can result in legal expenses.
- Cyberattacks: You may have sensitive information stolen through ransomware attacks or identity theft.
- Employee liability: A workplace accident involving an employee can result in significant costs for the business.
What types of insurance can help protect you as a self-employed person?
Now that we’ve covered the main risks self-employed professionals face, let’s look at the types of insurance that can help reduce their financial impact. The table below provides a quick overview of each type of coverage.
| Type of Insurance | Coverage | Recommended |
| Third-Party Claims | Property damage, bodily injury, professional liability, and legal defense | Consultants, advisors, attorneys, architects, healthcare professionals, or technicians |
| Income Protection | Illness, accident, sick leave | Self-employed individuals who depend on their daily work |
| Assets | Work tools, furniture, and business premises | Any self-employed individual with business premises and machinery |
| Legal Disputes | Legal advice, defense, claims for damages, and legal fees | For business relationships with many clients |
| Digital Risks | Data theft, fraud, cyberattacks, and related costs | Professionals who work with digital systems |
| Health | Medical consultations, tests, and treatments | For those who do not have employees who can cover for them |
Insurance for self-employed individuals based on their line of work
Not all self-employed professionals face the same risks, so the type of insurance you need depends on the work you do. Other important factors include whether you deal with clients in person, operate from a business premises, or rely on tools and equipment to do your job.
For this reason, before purchasing any of the insurance policies for self-employed individuals discussed in the previous section, it is advisable to analyze the risks associated with each line of work.
1. Service providers
This category includes consultants, advisors, lawyers, accountants, software developers, graphic designers, marketing specialists, translators, and other professionals who provide services based on their expertise.
For example, a mistake in a consulting report or an error when developing a website could lead to costly claims from clients. The most suitable types of insurance for these professionals include:
- Professional liability insurance.
- Legal defense insurance.
- Sick leave or temporary disability insurance.
- Cyber risk insurance.
2. Self-employed individuals with a physical location or business open to the public
If you own a restaurant, shop, café, hair salon, or training business, you may face risks such as property damage, theft, or business interruptions. For example, a fire could force you to close for a while. The following types of insurance can help protect your business:
- Comprehensive insurance for retail or business.
- Liability insurance.
- Property damage insurance.
- Legal defense insurance.
- Workers’ compensation insurance.
3. Professionals who perform technical or manual work
Another group of self-employed workers includes electricians, plumbers, builders, installers, maintenance technicians, carpenters, and renovation professionals. Their work involves using machinery, specialized tools, and carrying out tasks that can cause property damage or personal injury to others. The following insurance is recommended:
- Liability insurance.
- Accident insurance.
- Sick leave insurance.
- Insurance for professional tools and equipment.
- Insurance for vehicles used for business purposes.
4. Self-employed individuals who work primarily online
If you work as a digital nomad, such as a content creator, marketer, web developer, or e-commerce manager, your main risk is data security. A hack or data leak can damage your reputation. That’s why there are different types of insurance for self-employed workers designed to help protect you.
- Professional liability insurance.
- Cyber risk insurance.
- Data protection and legal defense insurance.
- Computer equipment insurance.
- Sick leave insurance.
5. Healthcare professionals
Doctors, physiotherapists, psychologists, nurses, and other healthcare professionals often carry a high level of responsibility in their work. Any claim related to patient care can lead to significant financial and legal costs. The most common types of insurance for this sector include:
- Professional liability insurance.
- Legal defense insurance.
- Sick leave insurance.
- Health insurance.
- Accident insurance.
How to prioritize insurance for self-employed individuals
When choosing insurance as a self-employed professional, it’s important to focus on the cover that protects your business, income, and personal assets. Below is a guide to which types of insurance should be your top priority based on the potential impact of each risk.
1. Insurance that helps protect income
Insurance that protects your income should be your top priority. If an illness or injury stops you from working, your income can drop significantly almost overnight.
To help protect your income, you can take out income protection insurance, which provides financial support if you’re unable to work due to illness or injury. Private health insurance can also help by giving you faster access to appointments, tests, and treatment, helping you get back to work sooner.
2. Insurance that helps protect assets
The next priority is protecting your business and personal assets. Professional liability insurance helps cover claims if your work causes damage or loss to someone else. If you have a business premises, business insurance can also protect your equipment and property against theft, fire, or flooding.
3. Insurance that provides operational peace of mind
Once your income and assets are protected, it’s worth thinking about legal protection. Legal expenses insurance can help cover the cost of dealing with claims, contract disputes, and other legal issues that may arise while running your business.
If you run your business online, cyber insurance can give you extra peace of mind. It helps cover the costs of data breaches, cyberattacks, and any legal claims that may result.
Common mistakes when purchasing insurance as a self-employed individual
Many self-employed professionals buy insurance without fully understanding what their policy covers. The problem often only becomes clear when they need to make a claim. Knowing the most common mistakes can help you choose the right policy and make sure you have the protection your business really needs.
1. Choosing a policy based solely on price
It’s easy to choose the cheapest insurance policy, but price shouldn’t be the only thing you look at. A lower-cost policy may not cover everything you need. Before you decide, compare what’s included, the coverage limits, any excess, and what’s excluded from the policy.
2. Failing to review the policy’s exclusions
Before choosing a policy, make sure you understand both what it protects and where the gaps are. Every insurance policy has exclusions, and if you’re not aware of them, you might find you’re not covered when you need it most. Pay close attention to the limits and exclusions for:
- Certain professional activities.
- Damages caused by specific acts of negligence.
- Incidents occurring outside the scope of coverage.
- Undeclared equipment or property.
- Specific technological risks
3. Copying the coverage needs of other professionals
No two businesses face exactly the same risks, even if they seem similar. For example, a graphic designer is more likely to need cover for professional mistakes, while a retail business needs protection for its premises and stock. Think about the specific risks your business faces and choose insurance that protects against the ones that could have the biggest financial impact.
4. Purchasing coverage that does not keep pace with the business’s growth
As your business grows, your insurance should grow with it. Many self-employed professionals keep the same policy for years without checking if it still meets their needs. If you’ve hired staff, increased your income, or bought new equipment, it’s a good idea to review your cover and make sure it’s still enough to protect your business.
How can self-employed individuals claim a tax deduction for insurance?
Some insurance policies for self-employed workers may be tax deductible if they’re related to your business. This means you may be able to claim the cost as a business expense and reduce your tax bill. To do this, you’ll usually need to keep the invoice, proof of payment, and record the expense in your accounts. The most common tax-deductible insurance policies include:
- Health insurance: Private health insurance for the self-employed individual, their spouse, and children, provided they comply with current tax regulations.
- Professional liability insurance: Insurance that provides protection against claims arising from professional activities.
- Comprehensive insurance: Covering facilities, equipment, furniture, and inventory.
- Commercial vehicle insurance: If the vehicle is used for business purposes and meets the requirements of tax regulations.
- Insurance for equipment, tools, or machinery: It protects the assets needed to carry out business operations.
Keep all documents related to your insurance policy and make sure you record the expense correctly in your accounts. It’s also a good idea to speak to a tax advisor to find out which insurance costs you can claim based on your business.
Internet for freelancers who travel the world
Most self-employed workers depend on the internet. A stable connection is essential for talking to clients, managing work, using apps, and joining video calls.
To avoid issues caused by slow or unstable internet, Holafly’s monthly plans are a good option. If you travel often for work, you can stay connected in over 160 destinations without switching eSIMs each time. You can choose between 25 GB or unlimited data, and connect multiple devices at once so you can keep working smoothly on different tasks.
If you only need a global eSIM from time to time for a few days, the Holafly international eSIM is a good option. It gives you unlimited data in a specific destination for just the days you need. It’s especially useful for business trips, trade fairs, or short events.
Frequently asked questions about insurance for self-employed workers
The most important insurance for self-employed professionals is the kind that protects your income, such as income protection or temporary disability cover, since it helps you stay financially stable if you can’t work.
It isn’t always required, but it can be highly recommended if you provide services or work directly with clients, since damage to third parties is more common.
Even with public benefits, time off work can have a big impact on a self-employed person’s income. That’s why income protection insurance helps cover your finances while you recover.
Working from home can expose you to professional liability claims, cyberattacks, loss of computer equipment, or sick leave.
Yes, some insurance policies for self-employed professionals related to business activities can be tax-deductible, as long as they meet tax regulations and are properly documented.
Plans that may interest you
Hi! I'm a Spanish-English translator working with Holafly, helping bring travel content to life for curious travelers. As a digital nomad with a passion for exploring, I'm always adding new spots to my bucket list. If you love to travel like me, stick around because you're in the right place to find inspiration for your next trip! ✈️🌍
