When considering starting a business as a sole proprietor, it’s easy to overlook the importance of insurance. However, regardless of how small your business might be, having the right insurance coverage can be a crucial part of ensuring your entrepreneurial journey runs smoothly.
Why Is Insurance Important?
While many types of insurance are optional for entrepreneurs, the protection they offer can be invaluable when unexpected situations arise. Insurance provides peace of mind and security, ensuring that unforeseen events won’t derail your business operations.
What Types of Insurance Should Freelancers Consider?
Every entrepreneur’s insurance needs are unique. The choice of insurance depends largely on your industry and the risks associated with it. For example, a consultant working primarily on a computer will need different coverage than a construction entrepreneur who operates heavy machinery.
Mandatory Insurance
For sole proprietors, there are few mandatory insurances. The most essential of these is the self-employed person’s pension insurance (YEL). This insurance is mandatory if your annual income exceeds a certain threshold and your business operates for more than four months a year. If your business involves the use of vehicles, you’ll also need traffic insurance.
Voluntary Insurance
Many types of insurance, such as accident insurance, liability insurance, and business interruption insurance, are optional but can offer critical protection. For instance, accident insurance can help you receive quicker medical care and financial support if you temporarily lose your ability to work.
Can Insurance Costs Be Deducted from Taxes?
In most cases, yes. As an entrepreneur, you can typically deduct insurance premiums related to your business, including YEL payments, from your taxes. This is an important factor to consider when planning your business finances.
Summary
As a freelancer, it’s important to carefully consider which types of insurance are most suitable for your business. The right coverage not only protects you from financial losses but also provides stability and confidence in running your business.
Start Your Business Safely
With the right platform, such as Valmista, you can focus on what matters most – growing your business. Insurance procurement and other financial matters are handled smoothly, and bookkeeping stays up to date automatically, for example, with the help of the OP Light Entrepreneur service. This ensures that you can pursue your business with confidence, knowing you have a world-class service platform and the necessary protection against potential risks.
