Articles - 29th August 2019

Is Freelance Insurance for me?

Words by Holly Patrick
Illustration by Will Francis

Let’s not beat around the bush – freelancing can be scary. Sticking it out on your own isn’t always the walk in the park you’d hoped it would be. Without the protection of a company behind you at all times, it might be worth covering your own back if things go pear-shaped. 

That’s where insurance comes in. You might have already taken some out in your personal life, but where work’s concerned, freelance insurance could save your skin; so if you’re putting feelers out into the world of self-employment, here’s what you should bear in mind.

Firstly, think about the level of insurance you need. Freelancing comes in all shapes and sizes; whether it’s your main source of income or you’re just doing a bit on the side, assess the level of protection you need for your work.

Dominic Guest, Head of Professional Indemnity at AXA UK, says that the level of cover will vary from risk to risk: “Depending on their work, freelancers may need cover for negligence, intellectual property, breach of confidence and defamation. The limit of cover you purchase needs to match the costs you’ll incur if someone brings a claim against you.”

You might be a seasoned freelancer, but no-one is immune to the occasional slip-up. Even if you’re confident in your work and you don’t think you’ll make a mistake, insurance has got your back if you do. “Even a small mistake can turn out to be so expensive that it puts you out of business. Some vloggers have been sued for defamation or copyright infringement” says Guest. Remember, your clients can have a mind of their own – sometimes things go wrong despite your best efforts and it’s important not to rush to blame yourself.

Psychologist and business coach Katie Woodland describes how she took out insurance just in case and has established her own rules for managing clients’ expectations. “There can often be differing expectations about what is physically possible with regards to recovering someone’s emotional state or helping someone’s business grow” she says. “I also have a rigorous screening procedure to ensure that the clients know in advance what is/isn’t possible and offer a guarantee system; 30 day money back guarantee on digital products/courses and a 60 day ‘do the work’ guarantee on all life coaching and psychological services.”

This is where Professional Indemnity (PI) insurance comes in. Put simply, this protects you if you’re alleged to have provided inadequate advice or services which mean that your client loses money. If you’re a coach or a consultant, you probably provide some advice to medium or large businesses, with bigger resources than yours. If one client disputes the quality of your services, you will need support to prove you haven’t been negligent” explains Guest.  “A PI policy will cover the costs of defending claims made against you even if they are unfounded.” As with any policy, you don’t have to take it out, but it’s worth seriously considering. 

If you deal with the public as part of your work, you could look into taking out Public Liability Insurance. This covers your back if there’s a potential risk that you may cause physical damage to someone or their belongings. For example, if you’re a photographer, an unsuspecting passer-by could trip over your equipment and injure themselves. It doesn’t matter where you deal with clients – on your premises, visiting clients or attending events – there could be significant costs in this situation. 

Another one to consider is contents insurance. You might have taken this out in the past already; if you’ve spent your hard-earned freelance cash on a swanky new laptop the last thing you want is to damage or lose it. If you’re running a small business, this policy is particularly important, especially if you work from your own office. It covers everything from documents, furniture and equipment should the worst happen – be it a fire, theft, flooding, loss or damage.

This one might make sense for newbie freelancers – if your office is a cafe or you’re a fan of the hot-desk, maybe portable equipment insurance is the one for you. Carrying expensive equipment such as laptops, mobile phones or cameras is a risk in itself; if you rely on your tech to make a living have a think about taking out this type of cover.

I know what you’re thinking – I’m a freelancer, where on earth am I going to get this money for insurance on top of everything else I’m constantly saving for? Insurance isn’t totally unreachable, even for those just starting out. A basic package doesn’t have to cost an arm and a leg and could save you from having to fork out in the future.

Anna King of Digital Risks, an insurance provider for digital businesses, explains how their online quote system can work in favour of freelancers on tight budgets. “A basic business insurance package doesn’t have to be expensive. The key is to find a policy that best covers the risks you face and the level of cover you require. Our system is ideal because it helps you to work out the priorities for your business while ensuring you’re not paying for anything you don’t need.” 

Remember that insurance isn’t everything. It seems like a big deal, and for some lines of work it’d be ill-advised to not take it out, but if you don’t want to invest just yet it’s not the end of the world for your career. If things don’t go quite to plan, there are other ways of saving your bacon. “Insurance is your last line of defence when it comes to protecting your livelihood… there’s a lot that freelancers can do to ensure things don’t reach that point” explains Anna. “Ensure you have contracts and statements of work in place as soon as you start working with a client. You should also agree and implement processes for approvals, updates and regular communication to minimise the chances of misunderstandings.”

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