Do self-employed foster carers need business insurance?

Being self-employed does not, by itself, create a requirement for a foster carer to buy business insurance. The relevant question is what work you carry out, what assets you use and what your fostering agency’s agreement requires. Fostering allowances are intended to support the care of a child or young person and are not treated in the same way as income from a separate trade or profession.

Insurance for separate self-employed work should be considered independently. For example, the appropriate cover may depend on whether you:

• provide services to members of the public or other businesses;
• visit clients or allow clients to visit your home;
• use tools, equipment, stock or specialist materials;
• give professional advice;
• employ anyone or engage another person to work for you; or
• use a vehicle for business purposes.

Depending on those activities, a policy might include public liability, professional indemnity, cover for business equipment or stock, employers’ liability, or business-use vehicle insurance. The correct cover cannot be determined from your self-employed status alone. Describe your work accurately to an insurer and check exclusions, limits and conditions before relying on a policy.

Fostering and household insurance

Your fostering agency should explain how its own insurance arrangements relate to your responsibilities as a foster carer. This may include questions about damage to household items, loss of keys, personal possessions, transporting a child, or activities undertaken as part of an agreed placement. Do not assume that an agency’s cover protects your home, vehicle or belongings in every situation, and do not assume that a standard household policy automatically includes fostering-related circumstances.

Tell your buildings or contents insurer that you are applying to foster, or have started fostering, if its terms require you to disclose a material change in circumstances. Ask specifically whether children placed in your care are covered under the policy and whether there are exclusions for accidental damage, personal possessions or high-value items. If the insurer changes the terms, requests additional information or declines cover, discuss the position with your agency before accepting a placement.

Vehicle insurance also needs careful checking. If you use a car to take a foster child to school, appointments, contact arrangements or activities, confirm that the policy permits the relevant use. Ordinary social, domestic and commuting cover may not include every type of business use. The agency may have its own requirements, but you remain responsible for making sure your policy details are accurate.

What to check before applying or starting a placement

• Write down the activities involved in your separate self-employed work, including where they take place and whether other people visit your home.
• Ask an insurer or qualified insurance adviser what cover those activities require.
• Read your fostering agreement and ask your agency what insurance arrangements apply to foster carers.
• Check your household, contents and motor policies for disclosure requirements and relevant exclusions.
• Keep policy documents, certificates and renewal information in a safe place, and tell the insurer about relevant changes.

Insurance is separate from the fostering assessment. An agency may ask how you would manage risks in your home, vehicle and self-employed work, but buying a policy does not replace safer working arrangements, safeguarding procedures, training or the agency’s assessment requirements. Likewise, holding business insurance does not automatically make a person eligible to foster.

If your self-employed work takes place in the home or involves regular visitors, explain this during your assessment. The agency can consider whether the work affects privacy, supervision, safe storage, household routines or the space available to a foster child. Where the work involves tools, machinery, hazardous substances or significant disruption, you may need to demonstrate how risks will be controlled. These practical considerations are distinct from the question of whether an insurer requires a particular policy.

Keep fostering allowances and self-employed earnings clearly recorded for your financial records, but do not use the existence of an allowance as the basis for choosing insurance. The nature of the separate work and the responsibilities set out by the fostering agency are the factors that matter.