Freelancing is probably one of the fastest-growing sectors of the UK economy says the Association of Independent Professionals and the Self-Employed (IPSE).
As the ranks of these freelancers are swelling, their need for appropriate insurance is thrown into the spotlight so, here are some of the most frequently asked questions about insurance for freelancers.
I’m a freelancer, why do I need insurance?
What is likely to have drawn you to your role as a freelancer is the freedom, independence, and potential rewards of the job. But these may also be the biggest drawback – if something goes wrong, your freedom and independence mean that you alone are left carrying the can.
Freelancer insurance is designed to help compensate you for the losses incurred as a result – and, so, protect the income you have worked so hard to achieve.
What can go wrong – what are my risks as a freelancer?
There are three principal risks you face as a freelancer – and the financial losses they may entail have to be met from your own pocket in the absence of the appropriate form of insurance:
- professional indemnity;
- public liability;
- theft, loss or damage of the equipment you use as a freelancer.
What is professional indemnity insurance?
When you offer your services as a freelancer, your clients are entitled to a level of knowledge and competence on your part that is commensurate with your background, qualifications and experience.
If the service you deliver falls short of those reasonable expectations, if you make an error of judgment or a simple mistake, your client may sue you for professional negligence and claim compensation for any losses he or she has suffered as a result.
Depending on the losses sustained by your client, those claims may run into thousands of pounds – seriously undermining the financial viability of your freelancing business. Professional indemnity insurance covers any such claim and the legal costs associated with it.
RPC Legal has estimated that as many as 500 different types of freelancers, professionals, and the self-employed currently buy professional indemnity insurance.
Do I also need public liability insurance?
As a freelancer, you need to worry not only about liability for work you are doing for your clients, but even members of the public.
If the actions you take – or fail to take – during you work as a freelancer results in a member of the public suffering an injury or having their property damaged, you may be sued for compensation.
Once again, the value of those claims may be significant – especially if someone is injured – so, public liability indemnity insurance is necessary to cover the potential amount of the claim and the legal costs involved.
Can I insure against the theft, loss or damage of the equipment I need for my work?
The simple answer is that yes, indeed you can.
Freelancers depend for their business on reliable and immediate contact and communication with their clients and potential clients. If you are deprived of those communications for whatever reason, you stand to lose valuable contracts and commissions.
Equipment insurance for freelancers, therefore, covers against the theft, loss or damage of your mobile phone, the computer you may use (both to communicate and on which you do your work), a tablet, printers, tools, and all manner of items used in your work.
Looking for insurance for freelancers? – Have a look at Dinghy