Insurance is a complex field, and you will need different policies depending on what it is that you are doing. In general, it’s fair to say that most business owners would need professional indemnity insurance to cover them if someone tries to say that they were negligent, gave them bad advice, or somehow injured them through their work.
Tradesmansaver suggests that Public liability insurance is a more interesting case. If you run a business where visitors will be coming to your premises, then you will need it. If you visit others, then you will still need it. Public liability covers a lot of different possibilities, and it is worth getting for the peace of mind.
Take, for example, a graphic designer. If you work online through job bidding sites, work only at home and do not visit clients face to face then you may not need it. If, however, you were to visit a client in their office, and someone else were to trip over a bag you had left on the floor, then that person would be able to sue you. It is unlikely to happen, but if it did happen even once then the cost to you would be more than decades worth of public liability insurance, so why not take it out?
It’s also worth remembering that some grant funders and lenders will not work with you if you do not have the full spectrum of insurance (products if applicable, professional indemnity, public liability, and policies to cover your office and any tools or assets that you have). So, if you have aspirations to grow your business beyond just working from home then it is worth looking into that as well.
Public liability insurance is often offered as part of a package alongside professional indemnity, and it is usually cheaper to get it that way than to take out two separate policies.
Whatever you decide to do, make sure that you shop around each year for your self employed insurance UK. Prices can vary massively and just because one provider offered you a good deal last year it does not mean that they will still be the best provider for you this year.