Why every Virtual Assistant needs insurance

New Virtual Assistants often ask if they need insurance and, if so, what type of cover they should get. As it’s vital that Virtual Assistants have insurance, I’ve put together a comprehensive summary of the different types of policies available to you to help you make an informed decision and ensure you don’t get sued or screwed!

Insurance is crucial for many reasons, especially for Virtual Assistants, due to the potential risks and damages that could affect your client’s reputation and business.

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!

Here are a few things to consider:

• What happens if you accidentally delete a client’s entire mailing list or CRM?
• What if you go to a client’s home or office and spill coffee on their laptop or break a piece of original artwork?
• What happens if you post something for your client on social media and it blows up and damages their reputation or results in them being sued by another company? What if the client blames you?
• Many companies won’t use contractors who don’t have insurance.
• Most Associates won’t outsource work to a VA who doesn’t have insurance.

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 covers the costs of subsequent legal expenses or compensation claims and is used by businesses that interact regularly with customers.

You may want to take out this insurance if you go to your client’s offices or homes. It’s relatively unlikely you will do any damage to a client’s property, but you could trip and throw your coffee over an expensive painting or on their computer, for instance.

Professional indemnity insurance

This protects you against negligence or mistakes. Claims can arise from a client who is unhappy with the professional service or advice you have provided and feel they have suffered a financial loss as a result. It will protect you against a client’s compensation claim for negligence or mistakes and covers any legal costs.

If you want peace of mind (especially if you post on social media for your client), this is the one you should have.

Without scaring you, many VAs post on social media for their clients but fail to appreciate 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 the client may be understanding, unless they are telling you exactly what to post, if something happens that impacts their brand online, they will probably lay the blame squarely on you.

So you’d better have insurance!

Employers’ liability insurance

You only need this if you employ people, but you don’t need it if you are a Limited Company with just one employee who owns 50% or more of the share capital.

So, simply put, you’re a Limited Company, and you’re the only “employee” of your company.

Product liability insurance

You only need this cover if your business involves the sale of physical products to members of the public.

Cyber insurance

Also known as cyber risk, data risk, or cyber liability insurance, this protects you from 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 usually includes the cost of investigating the crime, recovering lost data, restoring computer systems, reputation management, and extortion payments demanded by hackers.

It also covers notification costs if you need to inform any third parties affected by the incident, as well as any loss of income caused by your business being shut down.

Third-party coverages (resulting from claims against you) also include damages, settlements, and the cost of legally defending yourself against claims of a GDPR breach.

Income protection

Also known as income replacement or permanent health insurance, this cover will pay out an income if you must stop working due to an injury or long-term illness.

The amount you can claim will not replace the exact income you were earning before you had to stop working, though. You will only receive about half to two-thirds of your earnings (before tax).

You also won’t receive payments immediately and will usually have to wait at least four weeks, although payments can even start up to two years after you stop work.

You can also take out critical illness insurance, which can be cheaper and pays out a one-off lump sum if you have a specific serious illness, as well as short-term income protection insurance, which also pays out a monthly sum related to your income but only for a limited period of time (normally between two and five years) and covers fewer illnesses or situations.

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 your insurance company needs to know what it is.

You don’t need to tell your insurance broker every time your turnover increases, but you do need to tell them if it exceeds the maximum allowable turnover for your policy – as your policy will then need adjusting.

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 find your limit is by checking your policy documents. Your broker will also check at renewal that you haven’t exceeded the limit.

So, don’t forget to keep your insurer updated with any turnover changes to avoid under-insurance and to ensure your premiums reflect your current risk level.

Virtual Assistants also need to inform their insurance provider about overseas clients.

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 only had professional indemnity insurance but a few also had public liability, cyber, and income protection cover, as well.

The most popular insurance companies were Markel, PolicyBee, Hiscox (who are the underwriters for PolicyBee) and InsuranceBee. Monthly premiums ranged from £9 to £23 a month, depending on the cover they took out.

PolicyBee’s Professional Indemnity Insurance is highly recommended by VAs in the group and they are the insurance company I use myself.

UK VAs can use this link to receive up to 10% off.

Conclusion

Virtual Assistants need insurance to protect themselves and their clients from potential risks and liabilities. Ensuring you have the right coverage can prevent significant financial and reputational damage, providing peace of mind and professional credibility.

Insurance protects you against physical damage and injuries caused by your business, as well as claims of negligence, breach of confidentiality, dishonesty, libel and slander.

It’s important to know that if you want to work as an associate, Lead VAs will only hire associates who have the same level of insurance as them, and many businesses will only work with insured freelancers.

So, yup, you gotta have insurance, doll!

* Please note that I am not a financial expert. You should always consult a reputable insurance company to discuss options based on your individual situation and needs.

* I am also an affiliate of PolicyBee, which means I receive a small commission if you buy from them. I use PolicyBee for my own insurance, and I only recommend companies or products I know and trust.

* PolicyBee’s US sister company is InsuranceBee. Unfortunately, I am unable to arrange a reduction for my American readers as referral discounts are regarded as ‘kickbacks’ and are not permitted under US law.

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Do Virtual Assistants need a contract? The legal stuff every Virtual Assistant needs to know How to set your Virtual Assistant rates Common Virtual Assistant scams (and how to avoid them)