Freelance insurance

Every freelancer faces some kind of liability risk the moment they start trading. You will have responsibilities towards your clients and possibly members of the public if your work takes you to public spaces.

More on the pitfalls freelancers face

When working with clients as a freelancer, soon or later you will encounter one or more issues:

Non payers - already mentioned above and worth repeating because it is unfortunately very common.

Poor communication - especially at the beginning freelancers, keen to secure their first contract, tend to gloss over the finer detail. Almost always it leads to misunderstandings and client dissatisfaction.

The moving goal post - badly defined projects or work leaves room for negotiations and some clients like to exploit the grey area to get you to deliver more for free or worse, ask for their money back.

Who owns what - sometimes you will be working on very similar client projects and the tendency is to reuse some of the previous work. That occasionally gives a rise to disputes with clients.

Losing valuable data - while working with a client you may have access to sensitive information, either about their business or customer base. Even if it’s an accidental slip of the tongue in front of another client, giving trade secrets away can be very costly for you.

Reputation damage - the biggest fear for all freelancers. You work hard to get good feedback but then a client comes along who’s leaving bad reviews about you everywhere they can. That in itself can seriously affect future opportunities.

Luckily for you though, freelance liability insurance can help minimise a lot of these risks and that is what this article is about.

Professional indemnity insurance for freelancers

Otherwise also known as professional liability insurance for freelancers, this type of insurance is super important if your clients engage your services to use your skills and expertise to solve a problem.

You could be a consultant, an engineer, or a personal trainer. The list of professions that fall into this category is pretty long.

The way that professional indemnity insurance works is twofold. Firstly, at times of a dispute you gain access to qualified legal assistance while insurers pay the cost. Secondly, if you are found liable for any financial loss, the compensation will be paid by your insurance.

Do freelancers need professional indemnity insurance?

Since it is rather difficult to know what each day in your work life will bring, having some kind of backup, a peace of mind if you like, is essential.
Freelancer professional indemnity insurance protects you from the many risks implicit in your work. Despite your best efforts, you may be accused of many of what has been mentioned already and you don’t want to be facing that situation alone.

Legal help is very pricey these days and that alone can seriously damage your bank balance.

Public liability insurance for freelancers

Public liability insurance protects you against accusations when you may have accidentally caused an injury to either your client or a third party during the course of your work. The same applies to property damage.

You may need public liability insurance to protect yourself from financial burden if you’re sued for causing an injury or damage to a third-party property while performing your services to a client.

Public liability claims can arise from a variety of situations. Some common scenarios include:

• Slip and fall accidents
• Injury caused by a faulty product
• Damage to third-party property
• Food poisoning resulting from contaminated food
• Injury to a customer caused by inadequate health and safety measures
• Damage to or theft from a property
• Injury to a member of the public
• Accidents caused by poorly maintained equipment or machinery

These are just a few examples. The specific circumstances can vary greatly, and the importance of public liability insurance for freelancers is to provide financial protection against the legal actions someone might take against you.

Public liability insurance provides coverage for legal fees and compensation payouts, allowing you to continue your work without the fear of significant financial loss.

When do freelancers need public liability insurance?

If you meet your clients face to face in a range of settings that could also include the members of the public and their property, you may wish to consider this cover.

In fact you might find that certain professions have to buy public liability insurance in order to secure a contract. For example wedding venues ask that organisers have this type of insurance. The same goes for anyone else planning events at a third party location.

Having an office, visiting clients at their home or working in a public space are all good reasons to consider public liability insurance for freelancers.