Freelance Insurance - Things You Need To Know

So, a defining moment in your career has arrived. You've always been motivated & ambitious but begun to find the routine of working for someone else, well, a little dull. In your quest for new challenges, you've decided to paddle your own canoe. You've cut the rope of security offered by permanent employment & become your own  entrepreneurial island  - selling your skills & expertise to others who are willing to pay a price. You have entered the exciting and lucrative world of freelancing.

Before you blast off on your quest to become the next Richard Branson a number of business issues will need to be considered. Is there a market for your skills? Whats the going rate? How will you promote yourself? What trading structures will you operate under? What are the legal considerations? What Business Insurance do you need? 

In today's 'blame society' where people are quick to point the finger if things go wrong, freelance insurance has become an essential tool to protect freelancers from potentially ruinous claims.  Its easy to think that claims of negligence do not occur and that insurance is any unnecessary expense. Beware, the reality is different. As the UK freelance market expands, claims against freelancers are surging. For the sake of a few pounds a week, it makes sense to invest in insurance to protect your business if things go wrong.

Hunting for suitable frelance insurance policies can be time consuming and confusing. Here we examine the major policies a freelancer should consider.

Professional Indemnity Insurance:

Professional indemnity (pi) insurance protects your business against claims for loss or damage by a client if you have made mistakes or are found to have been negligent.
Professional indemnity insurance will cover the legal costs to defend allegations made against you and also the cost of any compensation awarded should the defence prove unsuccessful.

Public Liability Insurance: If members of the public or customers come to your premises or you go to theirs (including if you work from home), you should think about taking out public liability (PL) insurance. PL insurance covers any awards of damages given to a member of the public because of an injury or damage to their property caused by you or your business. It also covers any related legal fees, costs and expenses.

Employees Liability Insurance: Employers' liability insurance enables businesses to meet the costs of damages and legal fees for employees who are injured or made ill at work through the fault of the employer. Employees injured due to an employer's negligence can seek compensation even if the business goes into liquidation or receivership. The NHS can also claim the costs of hospital treatment (including ambulance costs) when personal injury compensation is paid. By law, an employer must have EL insurance and be insured for at least £5 million.

Freelance insurance is widely available from a number of specialist brokers and online websites. Packages are generally available from as little as £160 per annum. Before you buy cover make sure the policy offers comprehensive coverage, relevant to your profession. Check the excesses and any exclusions. Above all, always ensure that the insurance is underwritten by a reputable insurer.