Do Freelancers Need Insurance?

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Since an employer’s insurance coverage does not protect freelancers, they need to arrange their business insurance for themselves. Of course, the types of insurance a freelancer needs will vary, depending on the types of work done, exposure to the public, if anyone works for you and other factors.

This article will explain the different types of freelancer insurance available in the UK so you can decide what you might need, from public liability to professional indemnity to cyber.

Do I need public liability insurance as a freelancer?

Whether or not a freelancer needs public liability insurance depends on their physical contact with third parties. Many freelancers need public liability insurance, and this will be dictated by how much exposure they have to members of the public, passersby, and clients. If you meet in person with clients, there is potential for your business to cause injury or property damage. For example, if a client comes to your workplace and slips on a wet floor, they could blame you for their injury and sue.

However, freelancers who only work remotely probably don’t need it. For instance, a freelance software designer who works from home and only communicates with clients over email and Zoom wouldn’t have much use for public liability insurance.

Does a freelancer need professional indemnity insurance?

Freelance professional indemnity insurance is needed when clients pay you for designs, advice, or service given in a professional capacity. Any freelancer who works in these ways might need freelance professional insurance. For example, an architect paid for drawing building plans, a PR freelancer providing marketing services to a client, or a consultant hired to advise on a growth and acquisition plan.

Types of freelance insurance

 Depending on the type of work you do and your business’s structure (e.g., do you work alone or have you hired staff?), every freelancer faces unique risks. According to NimbleFins, here are the most popular types of business insurance for freelancers. 

Public liability insurance for freelancers

 Public liability insurance is very important for freelancers who deal with the public, such as clients or customers or even passersby. This type of business insurance can help you protect against claims of accidental injury or property damage related to your work.

Even if you work from a home office, a visiting client tripping over some work equipment could result in a claim. The client could blame you and sue you, which is expensive to defend. In cases like these, public liability insurance can protect freelancers by covering both legal expenses to defend your business as well as cover compensation claims if you’re found liable.

Product liability insurance for freelancers

 Product liability insurance protects freelancers against bodily injury claims or property damage due to the products you design, manufacture, distribute or sell. For example, a freelance shoe designer might need product liability insurance. As with public liability insurance, product liability insurance can protect against the cost of legal action and cover compensation claims if you’re found liable.

Professional Indemnity Insurance for freelancers

 Professional indemnity (PI) insurance protects freelancers who sell professional advice or other services. A client can sue if they believe your negligence or mistakes have caused them a financial loss. Professional indemnity insurance can help cover the cost of legal bills if you need to defend against a claim and cover compensatory damages payments.

Employers` liability insurance for freelancers

 If you’re self-employed and employ any staff or workers, even if they work on a temporary or casual basis, then you will need employers’ liability insurance by law. This type of policy protects you if any employees are injured or become ill in the line of work.

Contents insurance for freelancers

 Contents insurance can be essential for freelancers, as it protects your essential work equipment or other business items from theft, accidental damage, or loss. While coverage varies by policy, contents insurance can help you get back up and running by paying for repairs or a replacement.

Using your car for business for freelancers

 Freelancers using their car to meet clients or travel for work purposes must declare ‘business use’ with their car insurance provider. Failing to declare your car for business use could make your insurance invalid, in which case you’d be driving illegally.

Tax investigation & Legal expenses insurance for freelancers

 Tax and legal expenses cover can against potential investigations from HMRC and contract disputes, debt recovery, and other legal issues. In these cases, the policy could provide access to experts to guide you through a difficult situation as well as paying legal costs.

Cyber insurance for freelancers

 Cyber insurance can be vital for any freelancer using the internet to work or store sensitive customer information. Anyone can be a cybercrime victim. If you are hacked or have customer data stolen, it’s essential to have insurance to help mitigate the risk, investigate the attack, manage your reputation and cover a financial loss.

Personal accident insurance for freelancers

Since freelancers don’t get sick pay, personal accident insurance will help ensure you have an income if you can’t work due to injury. With pay-outs often in the form of either weekly or lump sums, it’s an essential policy type to consider if you want income security.

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