Self-Employed Insurance Adds COVID-19 Underwriting Losses to Its Coverage

The self-employed have been particularly affected by the unstable economic situation due to the health crisis caused by COVID-19. The closure of businesses, hotels, declining income and confinement caused losses that were difficult to recover. In fact, the National Federation of Self-Employed Associations (ATA) reported that one in three self-employed workers suffered losses of more than 30,000 euros in 2020 compared to 2019, resulting in the withdrawal of more than 100,000 workers. independent. from the third quarter of 2020, according to the special regime for self-employed workers (RETA).

In a context of crisis, having adequate cover such as sick leave, an accident that does not allow work or a family event, among others, becomes more important in the group of self-employed.

Vctor Lpez, head of insurance companies at Rastreator, specifies that “while it is true that during the months of childbirth, the drop in the number of self-employed people in turn translates into a drop in the search for insurance for employees and SMEs, later these first months of the year, an increase of 11% was observed in this type of policies for the self-employed, companies and the corporate sector, which indicates that despite the crisis, the self-employed not only does not exclude having insurance but also a plus. They are cautious and are interested in finding policies that meet their needs, ”he explains.

Insurance sector initiatives for the self-employed and SMEs

The pandemic has also resulted in the reduction or impossibility of the activities of the self-employed. Indeed, as the ATA indicates, only 23.6% of the self-employed currently have their profession fully operational, which makes it difficult for the self-employed to have the same economic level before the pandemic.

For this reason, many insurers have tried to provide facilities by offering aids such as discount on insurance premiums covering the risks of activities not carried out due to the state of alarm, as these exceptional measures prevent the group to develop adequately. its activity or in the case of individuals, a splitting of premiums without interest.

“The aid that the insurers themselves have launched have enabled the self-employed to change their perception of this type of product and now give more value to this option to be able to protect their business during a pandemic period, since as we have been able to verify in the comparator From, searches for this type of insurance have increased by more than 11% compared to the last quarter of 2020, indicating that this type of action together has been shown to be positive for self-safety. salaried workers ”, expresses Vctor Lopez.

Types of insurance for freelancers

In Spain, the law currently requires taking out civil liability insurance in the case of carrying out the activity for the public, vehicle insurance if a vehicle is used to carry out work and accident insurance for workers if this is necessary. necessary. The business they perform is risky as well as so hiring staff is necessary.

Insurance is essential for any worker who wants to be self-employed, but it is important to know what the needs are when hiring them, in addition to knowing whether they are mandatory or optional.

“A taxi driver needs insurance that includes a policy for his vehicle, while a self-employed person, such as a graphic designer who works from home, does not need this service. That is why it is important to know the risks and obligations of your profession in order to choose the one that suits you best and that the cost is adequate for each particular case ”, says Vctor Lpez.

For this reason, insurers create specific products that guarantee the coverage necessary for the normal exercise of work activities, in addition to the tax advantages and the security they entail.

ILT insurance vs civil liability

In all the insurance available, there are two policies that virtually any self-employed person should consider due to current circumstances. On the one hand, there is the temporary work disability insurance (ILT) which covers the worker in the event of incapacity to work or to carry out his activities, either due to an accident or a sick leave which includes Covid-19, and depending on the quote requested, the insurance will provide a daily subsidy.

On the other hand, there is civil liability insurance which covers damage that the self-employed insured may cause to third parties or to property in the exercise of his activity. With this type of policy, different coverages and amounts can be insured and given the crisis facing the sector, several companies have made it easier during the pandemic to split the payment that was previously annual. This type of insurance is essential if you have a commercial premises because it is necessary to apply for the license to open it.

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