Before we start it is safe to say that all freelancers require insurance of some kind. However, most freelancers do not know what kind of insurance they need. There is a huge variety of policies and policy amounts which can make it confusing, here we will clear that up for you.
Freelancing has various benefits, freedom to work when and how you want, and its downfalls, job insecurity. According to the recent stats, there were at least 2.2 million freelancers in the UK in 2020 and according to APSE (The Association of Independent Professionals and the Self Employed), 1.9 million freelancers were providing their services as their main job. While 239,000 of them were doing it as a side hustle.
These stats are pre-COVID-19, and it is believed a huge number of people turned to self-employment and freelancing due to the COVID lockdowns. Many new people have found freelancing attractive since then, and decided to make it their main job. However, freelancing carries various risks and challenges including no security from an employer. This independence pushes the freelancers to take every support and help they find. Moreover, it is not complicated and expensive to get such help and support as a freelancer, let’s start with the fundamental insurance plans a freelancer needs.
Types of Insurances a Freelancer Needs
Professional Indemnity Insurance for Freelancers
Some dissatisfied clients can make claims about your work. Professional Indemnity Insurance protects you from them as they could say you did not do the work well enough. This thing happens most of the time with freelancers.
Professional Indemnity Insurance provides you a cover to defend yourself against the false claims and allegations made by your clients against you. The insurer pays the client on your behalf to fix the damage or compensate.
A solicitor can also do this job for you but it is highly expensive as compared to indemnity insurance policy. If the court ruling comes against you, then you have to pay the compensation from your own pocket.
Public Liability Insurance for Freelancers
Public liability insurance covers the claims against you in the case of injuries or physical damage to property. For example, if you go to the office of your client or your client visits your place of business, and an accident happens in which you are at fault. In this case, you can be held liable for the damage. The damage could be a physical injury or damage of property, such as a laptop.
If the affected person files a claim against you, then the public liability insurance will cover your court expenses and any compensations you have to pay to the affected person.
Employers’ Liability Insurance for Freelancers
Employers Liability is the only business insurance plan that is required legally. Every company based in the UK with a minimum of one or more employees is required to have £5 million cover. This insurance plan covers claims made by the employees against their employers related to the injuries and illnesses at work.
Most of the freelancers work alone and independently. Strictly speaking, this insurance plan is not totally relevant to freelancers, but freelancers should be aware of it as some contracts provides this cover to freelancers. You will need it if you hire someone to extend your freelancing work.
Office and Property Insurance for Freelancers
As a freelancer, you will use various appliances and technologies in your office to provide your services, it could be a printer, desk, chair, PC, book, and various other things. The office and property insurance provides replacement or the repairing of your belongings if they get stolen, damaged, or broken. Under this insurance you will be able to carry on delivering your service with minimal interruption.
Cyber Insurance for Freelancers
Cybercrimes are becoming more regular and anyone with a laptop, tablet or smartphone can be the target. A hacker may cause serious damage as they can steal sensitive data, block your website, and/or cause a havoc.
Cyber insurance can help you to cover the mess created by a cyberattack. You will get technical expertise to stop these attacks and retrieve your data under this insurance plan. It will also pay off legal fees and compensations you have to pay for losing sensitive data.
Personal Accident Insurance for Freelancers
A personal accident insurance plan pays off weekly sum or lump sum if you are temporarily unable to work. If you are working alone and relying on your income source, then this insurance can be a lifeline for you and your business. The daily running costs for your business are also covered by personal accident insurance.
As a freelancer, you are your own boss. It is you who decides how much and which type of insurance you get. Speak to one of our team to discuss which options are best for.