Why every Virtual Assistant needs insurance

New Virtual Assistants often ask whether they need insurance and, if so, what types of cover are available. This guide explains the main types of business insurance that many Virtual Assistants consider, what they generally cover, and when they may be relevant, so you can have a more informed conversation with an insurer.

There are a number of reasons why many Virtual Assistants choose to have business insurance, particularly because of the potential risks and liabilities that can arise in the course of their work.

Virtual Assistants have access to personal data, contact details, intellectual property, cloud storage, bank accounts, social media accounts and even homes.

So, the potential for a cock-up is relatively high!

What happens if…

• You accidentally delete a client’s entire mailing list or CRM?
• You post content or use images on a client’s behalf, and someone claims copyright infringement or reputational damage?
• You accidentally send the wrong file, lose a laptop, or a client’s data is compromised while in your care? Even with GDPR compliance, you’re still responsible.
• You go to a client’s home or office and spill coffee on their laptop or trip and break a piece of original artwork?

Many businesses and Lead VAs prefer to work with contractors and associates who have appropriate business insurance, and some make it a requirement before working together.

These are the main types of policies and what they cover:

Public liability insurance

This protects against personal injury or property damage claims that result from your business activities. It can contribute towards legal expenses or compensation claims and is used by businesses that interact regularly with customers.

Many VAs choose this type of cover when they regularly visit client premises. While incidents like these are uncommon, accidents can happen – for example, you might accidentally damage a client’s laptop or other property during a visit.

Professional indemnity insurance

This type of insurance is designed to provide cover if a client claims they have suffered a financial loss as a result of negligence, an error, or an omission in the professional services you have provided. Depending on the policy, it may also contribute towards legal costs and any valid claims, subject to the policy’s terms and conditions.

Professional indemnity insurance is commonly chosen by Virtual Assistants, particularly those responsible for creating or publishing client content. 

Without scaring you, many Virtual Assistants post on social media for their clients without realising that it only takes one misplaced hashtag or ill-advised comment to damage a client’s reputation or embroil them in a media storm.

While a client may be understanding, if you’re responsible for creating or publishing content and something negatively affects their brand, they may hold you responsible.

This is one of the reasons professional indemnity insurance is often considered by Virtual Assistants.

Employers’ liability insurance

This type of insurance is generally relevant where a business employs staff.

Product liability insurance

This type of insurance is generally relevant to businesses that sell physical products to members of the public.

Cyber insurance

Also known as cyber risk, data risk, or cyber liability insurance, this type of cover is designed to help businesses deal with the financial impact of data loss, recovery costs and legal claims associated with data breaches, cyber-attacks, malware, ransomware and computer hacking.

So, let’s say you fall prey to a cyber attack and data or electronic systems are lost, damaged, stolen, or corrupted; the cover may include the cost of investigating the incident, recovering lost data, restoring computer systems, reputation management and, where applicable, extortion payments demanded by cyber criminals.

Cover may also include notification costs if you need to inform third parties affected by the incident, loss of income while your business recovers, and contributions towards legal defence costs, damages or settlements arising from third-party claims, including alleged GDPR breaches. The level of cover and any exclusions will vary between policies, so it’s important to check the policy wording.

Income protection

Also known as income replacement or permanent health insurance, this type of cover is designed to provide a regular income if you’re unable to work because of an injury or long-term illness, subject to the policy’s terms and conditions.

However, income protection policies don’t usually replace your full income. The amount paid varies between policies but is often around half to two-thirds of your pre-tax earnings.

Most policies also include a waiting period before payments begin. This can vary from a few weeks to several months, or even longer, depending on the policy you choose.

You may also wish to explore critical illness insurance, which is designed to provide a one-off lump sum if you’re diagnosed with a serious illness covered by the policy. Short-term income protection insurance is another option and is designed to provide a temporary monthly income if you’re unable to work. As with all insurance products, the cover, exclusions and policy terms vary between providers.

Your turnover matters for your insurance

Turnover is the money your business brings in over a given period before expenses and tax are deducted, and it’s important that your insurer knows your current turnover.

You don’t usually need to tell your insurer every time your turnover increases. However, if it exceeds the maximum turnover allowed under your policy, you should let them know, as your cover may need to be reviewed or updated.

The amount your turnover can increase before you reach your maximum limit depends on your insurer and the policy you’ve taken out.

The best way to check your limit is to read your policy documents or ask your insurer or broker. They’ll usually review this with you when your policy is renewed.

It’s worth keeping your insurer updated if your turnover changes significantly, as this can help ensure your cover remains appropriate for your business and reflects your current level of risk.

If you work with clients based overseas, it’s worth checking whether your insurer needs to know, as some policies include conditions relating to where your clients are located.

I don’t use associates, nor have I ever worked as one, but when I mentioned on social media about needing to update your insurance company if your turnover rises, a VA who runs an agency said:

“The other thing we have to keep our insurers informed of is the percentage of our clients based outside of the UK and in which location. Plus, now I have a team, they asked me to ensure all team members have the same levels of insurance to mirror ours.”

Which is worth knowing!

The insurance most Virtual Assistants have and who they use

A poll in my VA Handbookers Facebook group revealed that the majority of Virtual Assistants they had professional indemnity insurance, but a few also had public liability, cyber, and income protection cover, as well.

The most commonly mentioned providers were Markel, PolicyBee and Hiscox (the underwriter for PolicyBee at the time of writing). Members reported paying anywhere from around £9 to £23 per month, depending on the level of cover and their individual circumstances.

PolicyBee is one of the providers most commonly mentioned by members of our Facebook community.

Choosing an insurer is a personal decision, so it’s worth comparing your options and reading the policy documents carefully before taking out cover.

If you’d like to find out more about PolicyBee, you can use our affiliate link and receive up to 10% off Professional Indemnity insurance. If you have any questions about the cover, PolicyBee will be able to explain the available options and answer any questions you have about their insurance products.

Conclusion

Virtual Assistants can face a range of potential risks and liabilities in the course of their work. Understanding the different types of insurance available can help you discuss the most appropriate cover for your business with an insurer.

Business insurance may provide cover for accidental damage, injury claims and a range of other risks, including allegations of negligence, breach of confidentiality, dishonesty, libel and slander. As with all insurance, the level of cover and any exclusions will vary between policies.

If you plan to work as an associate, you may find that some Lead VAs expect you to have insurance that matches their own level of cover. Likewise, some businesses prefer to work with insured freelancers.

Every Virtual Assistant’s business is different, but understanding the options available puts you in a much better position to decide what level of cover, if any, is appropriate for you.

* Please note that we are not financial experts. If you’re unsure which type or level of cover is appropriate for your business, speak to an insurer or insurance broker who can discuss your individual circumstances and needs.

*The VA Handbook is an affiliate of PolicyBee, which means we may receive a small commission if you purchase a policy through our affiliate link.