Recommended freelance insurance
While Employers’ Liability Insurance covers the cost of compensation to employees and Motor Insurance covers your vehicle, there are other claims that you may need to protect your freelance business against. This are explained below:
IMPORTANT NOTE: Before taking out an insurance package and in the consideration of what cover you require as a freelancer, it is advisable to seek the advice of a legal professional. Click here for Specialist freelancer/contractor insurance providers
Professional Indemnity insurance
Professional indemnity (PI) insurance protects your business from the cost of compensation to clients if your professional advice or services have caused them financial loss. This type of insurance cover is legally required in certain professions. These include law, accountancy and financial services.
However, it is an important insurance to consider if you are a freelancer operating in any professions where you give professional advice. This could include (but is not exhanustive to); management and computer consultancy, publishing, engineering design and marketing.
Does Professional Indemnity cover need to be in place at the time the mistake was discovered or when it was made?
In Summary: Typically, when the claim is made, but as ever with insurance, the devil is in the detail. Please read through the following paragraphs written by Insurance expert, Chris Moore, to understand this issue further...
Full Answer: A typical IPSE Member would have a “Claims Made Policy”. With such a policy, cover responds to a claim against it at the time that the claim is made, regardless of when the event causing the claim took place.
“If an event took place on 14th July 1998, which gave rise to a claim being made today against the Claims Made Policy then to be of value that Policy must be in existence at the time the claim is made, i.e. today."
The sole limitation to this is that there frequently exists a Retro-active Date of Inception (RDI), which limits the earliest an insured event can have taken place.
Use of the word “inception” in insurance terms describes the first date on which the Policy is valid; the start date. Because of the nature of (in particular) Claims Made Policies, it is common practice for Insurance Companies to allow an RDI reflecting the origination of a continuous coverage.
So if a Company took its’ first coverage in June 1994 and maintained coverage until today, then a Policy incepting in June 2005 would (should) have an RDI of June 1994. In this event, the June 2005 Policy would protect the Insured against claims made now concerning an event which took place at any time after June 1994 (the RDI).
Public liability insurance
Public liability insurance covers you against accidents to members of the public or damage to property that occurs as a result of your freelance business activities. It also covers any related legal costs.
Why is it important to have Public liability insurance?
Even if you work from home, you may need public liability cover. If clients visit you there, the policy will cover you if they injure themselves while they are on your premises – it could be something as silly as tripping over a computer cable.
What should Public liability cover include?
It is important that if you regularly work off site, your policy should cover this too.
Property and contents insurance
You will need to insure your business property, including premises, fixtures and fittings, stock, computers and equipment. If you work from home, you need to check that equipment used for business purposes is still covered by your home contents insurance, or purchase specific business insurance.
What should Property and contents cover include?
In response to a growing trend in home-working, an increasing number of insurers now offer buildings and contents policies that specifically include cover for business stock and equipment.
- Specialist freelancer/contractor insurance providers
- IPSE's Guide to freelancing
- IPSE's Guide to freelance insurance