Aside from getting new clients, one of the major challenges freelancers face is knowing the types of insurance for freelancers.
Freelancers like every other business owner need some form of business insurance and it is important they know exactly what types of insurance work for freelancers.
Not every form of business insurance policy is needed by someone who is a freelancer.
In this post, I have discussed the types of insurance for freelancers and how they work.
If you are skeptical as to why a freelancer should get business insurance, I have provided a couple of reasons.
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Why Freelancers Need Business Insurance
- Cover for personal injury
If you sustain an injury as a freelancer, it could make you incapacitated and unable to carry out a client’s work.
Not only do you need business insurance to pay for your medical bills, but you also need one to compensate you for losses you will incur.
You are going to incur losses while you are unable to finish up a client’s work due to a personal injury.
Business insurance for freelancers covers you against losses due to personal injury and compensates your medical bills.
- Cover against liabilities
Your line of work as a freelancer involves offering services and advice to people. If you are good at what you do, you will always achieve 100 percent satisfaction.
Nonetheless, 100 percent satisfaction as a freelancer may not always be achieved. Some clients will be unhappy, unsatisfied, and possible blame you for any loss they suffer.
Such clients can go as far as filing liability claims against you.
You could be at fault, possibly you made a mistake or gave a wrong suggestion, or they may just be unhappy at your services.
It does not matter. Once they are unhappy, you are sure you would have the lawyers knocking on your door.
Business insurance covers for such liabilities when they arise.
- Cover for personal property
Your job as a freelancer requires certain pieces of equipment such as your laptop or smartphone.
If anything goes wrong with them, let’s say they get stolen or damaged, your work could be hindered.
With business insurance, a freelancer can get cover for his or her personal property and not be deterred when they get bad or stolen.
Now, let’s see the types of insurance for freelancers.
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Types of Insurance For Freelancers in the United Kingdom
If you are a freelancer in the United Kingdom or any country in Europe, you should get any of:
- Professional indemnity insurance
- Public liability insurance
- Portable equipment insurance
- Personal accident insurance
- Employers’ liability insurance
Professional Indemnity Insurance for Freelancers
Professional indemnity insurance is the most popular insurance policy for freelancers.
It covers for mistakes you make as a freelancer and clients who just love making a fuss about everything.
We are humans and the best of us make mistakes. In the corporate world, you could pay dearly for a mistake and this is what professional indemnity insurance for freelancers covers.
Do Freelancers Need Professional Indemnity Insurance?
Yes! Freelancers need professional indemnity insurance and I would show you why.
When you have unhappy clients, or you make mistakes in your article or code or violate the demands of a contract, and so on, you can have liabilities filed against you.
Aside from the benefits, you stand to gain from professional indemnity insurance, some clients will need you to have one before they can give you a contract.
Your job as a freelancer involves delivering work speedily and with perfection. You are expected to meet the client’s demands and expectations.
Things may not always go as planned and this is where professional indemnity insurance comes in.
Cost of Professional Indemnity Insurance for Freelancers
The cost of professional indemnity insurance for freelancers is around £160 per annum.
Public Liability Insurance for Freelancers
Another type of insurance for freelancers is public liability insurance. It protects you when a member of the public claims your work affected them.
The effect may be a bodily injury or damage to your property. Whatever the damage is, public liability insurance insures you from claims filed by members of the public.
It will pay compensations if you cause damage to third-party property or cause persons to sustain injuries.
Do Freelancers Need Public Liability Insurance?
You may not need public liability insurance as a freelancer. For persons who do not require physical interactions, there is no need for one.
If you are a freelancer who would have people come to an office space or business premise, you need to have public liability insurance in place.
Someone may visit your office space and get injured or suffer damages to their car parked.
As long as they are consulting with you, you owe them some form of compensation.
Interestingly, this insurance cover is quite cheap and you would not need to break the bank to have one.
Cost of Public Liability Insurance
The cost of public liability insurance for freelancers is around £35 every year.
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Portable Equipment Insurance For Freelancers
One of the types of insurance for freelancers is portable equipment insurance.
Your equipment as a freelancer is as important to your job as your skills and expertise.
Without them, you would be unable to carry out those things you know how to do.
When they are faulty or stolen, you would need to replace or repair them as losing your laptop or smartphone is detrimental to your business.
The portable equipment insurance pays for the replacement or repair of work equipment when it is damaged or stolen.
If you lose your laptop or smartphone or dropped any causing damages, you do not have sweat about it.
With portable equipment insurance for freelancers, you are covered.
Cost of Portable Equipment Insurance
The cost of portable equipment insurance depends on the equipment being insured. One may have to pay about £80 to £100 per year.
Personal Accident Insurance for Freelancers
Missing a deadline and being incapacitated to complete a client’s work due to personal injury may lead to low earnings.
You may be unable to carry out your enterprise if you sustain an injury and this may incur financial losses.
The personal accident insurance for freelancers covers financial losses due to accidents and personal injury.
It also covers the cost of hiring someone to complete a job on your behalf when you are injured.
Cost of Personal Accident Insurance
The cost of personal injury insurance varies from company to company. Nevertheless, the annual fee for this insurance cover is between £100 to £150.
Employers’ Liability Insurance
The employers’ liability insurance is only required for freelancers who have employees.
It is a requirement by law and heavy fines follow freelancers who have one or more employees that fail to buy employers’ liability insurance.
This insurance cover is similar to public liability insurance. The difference is that it applies to a freelancer’s employees.
It covers emergencies or injuries sustained by an employee while working for you.
Freelancers who do all their work alone do not need this insurance cover. Those who have employees do not just need this to protect their staff, it is a requirement by law.
Cost of Employers’ Liability Insurance
The cost of employers’ liability insurance is around £60 per year.
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That’s it on the types of insurance for freelancers in the United Kingdom.
If you are a freelancer, you should have at least 4 of the insurance covers I have listed.
Freelancers that employ others must have the employers’ liability insurance including others.
Those who go solo can make do with just the professional indemnity insurance, portable equipment insurance, personal injury insurance, and public liability insurance.