If you’re self-employed in Spain, you already know it’s quite the adventure—freedom, flexibility… and a long list of responsibilities.
One of the most common questions we receive at Legal Allies is:
What insurance do I need as a freelancer? Is it mandatory? Which policies make sense for my type of business? Can I deduct them from my taxes?
In this guide, we explain clearly which types of insurance are mandatory by law, which ones are highly recommended, and how to use them to reduce your tax bill.
What Insurance Is Mandatory for Self-Employed Workers?
Not all freelancers face the same legal requirements. However, in certain cases, the law does require specific insurance coverage.
- Professional Liability Insurance
Mandatory if you work in a profession where mistakes could harm clients, such as:
- Doctors
- Lawyers
- Architects
- Plumbers, electricians, or installers
- Maintenance technicians
- Academy instructors
This insurance protects you in case of errors or negligence during your work, covering third-party claims.
Even if it’s not legally required in your field, it’s strongly advised if you work with the public or in other people’s homes.
- Commercial Vehicle Insurance
If you use a car, van, or motorbike for work, insurance is compulsory. Even if the vehicle is personal, if it’s used for professional purposes, your insurer must be notified.
- Collective Agreement Insurance
If you employ workers, some industry agreements may obligate you to contract accident insurance for your employees.
Recommended Insurance for Freelancers
While not mandatory, these policies can save you from financial, legal, or health crises.
Private Health Insurance
Ideal for:
- Avoiding long public waitlists
- Staying healthy and minimizing sick days
- Proving health coverage if you’re not registered in Spanish Social Security (e.g., newly arrived foreigners)
Tax benefit: You can deduct up to €500 per year per insured individual, including spouse and children under 25.
- Temporary Disability Insurance
This policy pays you a daily amount if you need to stop working due to illness or injury.
Why is it essential? Because Social Security sick pay is often slow and limited—if you can’t work, you don’t earn.
Tax deduction: This insurance is deductible under Spanish income tax (IRPF) if it covers temporary disability.
- Life Insurance
Not mandatory, but often requested if:
- You apply for a freelance business loan
- You rent a commercial space
- Your family depends on your income
It can be linked to mortgages or loans, or used to protect your loved ones.
- Multi-Risk Insurance for Premises or Equipment
If you have an office, store, or warehouse, this policy covers:
- Fires
- Theft
- Water damage or electrical faults
- Civil liability for client injuries on your premises
You can also insure computers and professional tools.
Tax Benefits of Self-Employed Insurance
Freelancers can deduct insurance costs as business expenses if the following conditions are met:
- The insurance is directly linked to your business activity
- It’s properly invoiced and paid
- It’s correctly recorded in your expense ledger
| Insurance Type | Deductible in IRPF? |
| Health (self + family) | Up to €500/year |
| Temporary disability | Yes |
| Professional liability | Yes |
| Multi-risk (premises/tools) | Yes |
| Life insurance | Only in some business-related cases |
What If You’re a Foreign Freelancer?
Insurance is also crucial if you’re regularizing your status or applying for:
- Entrepreneur visa
- Self-employment permit
- Renewal of residence with economic activity
Spanish immigration authorities often require proof of financial solvency or health coverage. The right insurance can help support your business plan or professional activity.
Real Cases
Jin, a Chinese shop owner in Madrid, suffered a robbery that wasn’t covered because he lacked multi-risk insurance. We helped him partially claim from the landlord and later arranged a tax-deductible policy.
Sandra, an Argentinian therapist, took a three-week medical leave. Thanks to her temporary disability insurance, she received €900 for the downtime. She also deducted the expense from her tax return.
Being self-employed in Spain is no walk in the park. But you can protect your business, your health, and your finances by choosing the right insurance. Best of all many of these policies can help you pay less in taxes.
At Legal Allies, we help you:
- Select the right insurance for your activity
- Draft contracts with legal protection
- Review policy clauses and tax deductions
Because a good insurance policy isn’t just protection… it’s a smart strategy.
