It’s nearly National Freelancers Day (23 November 2011, in case you’re wondering).
Naturally, we’re fully behind it; and as part of our support we thought it might be useful to talk a little about freelancers’ insurance.
(Don’t worry, we’ll keep it light.)
Now, we know that researching and buying insurance isn’t everyone’s idea of fun. But it is a necessity.
Why? Because being the little guy gives you freedom but it also makes you vulnerable. Making do without the security of an employer means you need all the help and support you can get.
Getting that support isn’t as complicated or as expensive as you might think. It’s all about knowing the risks you face and doing something to protect yourself against them.
So let’s start with the basics.
Professional indemnity insurance
Or maybe professional liability insurance – depends on who you talk to.
We call it professional indemnity insurance and it protects you against claims of negligence made by dissatisfied clients. That happens more often that you might think.
If you’re in dispute with a client over the work you’ve done for them, professional indemnity covers the cost of defending any allegations or actual claims made against you.
Your insurer meets the cost of correcting your mistake – if there is one – and/or pays compensation or damages to your client on your behalf.
A solicitor can do some of the legal stuff for you too, of course, but they’re not exactly cheap. A few hours work can cost the same as an annual professional indemnity insurance premium and they can’t help if a court decides you’re liable for your client’s costs.
Public liability insurance
This one covers claims against you for bodily injury and/or physical damage to property. Useful if you’re particularly clumsy.
If you go out and about to clients’ premises or they visit yours, and there’s an accident that’s your fault, you could be liable for their damages.
And if your client claims against you, public liability insurance covers the cost of your day in court and any compensation you have to pay.
Employers’ liability insurance
The only legally required business insurance you might need. By law, every limited company in the UK with more than one employee has to have a minimum of £5m cover (most insurers only offer £10m).
It covers claims made against employers – by their employees – for injuries and illnesses sustained at work.
So why is that relevant to freelancers? Strictly speaking, it isn’t. However, it’s not unusual for a client to request employers’ liability insurance as a contractual requirement so it’s a good idea to know what it is and what it covers.
Office and property insurance
This insurance covers the stuff you need to do your job. Ordinarily, this means the things in your office (desk, chair, PC, printer, plants, book etc) and the technical things you take out with you (laptop, PDA, tablet etc).
Personal accident insurance
If you’re temporarily unable to work, personal accident insurance pays your business a weekly sum or a lump sum if you’re more permanently out of action.
It covers your medical expenses and the day-to-day running costs of your office and it can pay for an extra pair of hands if you need help keeping your business going in your absence.
If you need help deciding which insurance you need, feel free to get in touch. Friendly, expert advice is just a phone call away…