Essential Business Insurance for Freelancers

Freelancing has risen in popularity over the past few years, with more and more people opting to manage their own skills, and earn a living independently. What a lot of freelancers don’t realise, however, is that they could be vulnerable to many of the same risks as a more traditional business is – and that these risks can be protected against by having the proper business insurance in place. Some of the more common polices that a freelancer may consider are listed below, but remember, this is in no way an exhaustive list, and each freelancer should seek their own advice from an insurance professional before purchasing policies.

Professional indemnity insurance

This is possibly the most common insurance policy for freelancers across a range of industries, to consider. If you provide a service, such as advice or consultation, to customers, then you may benefit from the protection of professional indemnity insurance.

The policy protects you in the event a client or customer suffers physical, financial or material loss as a direct result of your services. For example, solicitors, architects and physiotherapists would probably want to have professional indemnity in place, as the work they carry out heavily involves the risk of professional liability.

These are not the only professions, however, that should consider having professional indemnity in place. Any freelancer who offers a service – as opposed to a product – to customers, could benefit.

Income protection insurance

Income protection insurance covers you in the event that you are unable to work, usually due to ill health or physical injury. The policy can typically pay out 50-70% of your regular income until you have recovered.

This protection is often particularly pertinent to freelancers, as they do not have the security of a company around them to take the flack if they are unable to work. You should consider the state your financial wellbeing would be in if you were unable to work for a period of time.

Public liability insurance

If you cross paths with members of the public at any point during your work, for example if they visit your home – or you theirs – then you may need to have public liability insurance in place. Public liability can provide financial protection for you if you are deemed liable for causing personal injury or property damage.

This is a very common policy for businesses to take out – and freelancers are no different. Even if you do not operate from your own business premises, you could still accidentally cause harm to a member of the public through the course of your work. Public liability insurance ensures that you are not left financially vulnerable should someone make a claim against you.

Working from home

Many freelancers do not operate from offices, but are based at home. If this is true for you, then you may need to take out additional insurance to protect your business. For example, if you rely on specialist or expensive equipment to carry out your work, there’s a good chance that it would not be covered under a domestic contents insurance policy.

You would need to take out a policy specifically for business contents in order for business equipment to be protected against loss, damage and theft. The same may also be true of other types of insurance - for example car insurance - so it’s worth contacting your insurance provider to determine exactly what you do and don’t already have protection for.

The bottom line is, if you work – in part or wholly – on a freelance basis, remember that you are not exempt from the risks that a more traditional business faces daily. Therefore, neither are you exempt from the need to have business insurance in place. It may be good practice to consider the extent to which risks could threaten you financially, and take out insurance accordingly for protection. Having the right cover in place could save you time, effort and a great deal of money in the long run – ensuring happiness and health for your future business.