If you’ve been freelancing for a while, or are just getting started, chances are you’re aware that having some sort of insurance in place is a good idea. But where do you start?
Insurance can seem complicated and let’s face it, it’s not exactly exciting. Here we’ve put together a simple guide to help you make sense of what you need and how you can go about getting covered.
Why get insured?
Insurance may seem like an unnecessary burden on your finances and something you’ll be fine without, but in most cases the long-term benefits of having the right cover in place will usually outweigh the cost.
There are three main things to consider when deciding whether to take out business insurance are:
Could you afford the cost of a claim? Between legal and compensation fees, claims can sometimes cost businesses thousands, if not millions. It’s worth thinking about whether you could handle this cost without cover.
Do you have a legal obligation? While it’s less common for freelancers to have staff, if you do, employers’ liability cover is a legal requirement in the UK, even if they are part time, contracting or temporary. You could be fined if you don’t have it in place, with the certificate to prove it.
Will insurance open up more job opportunities? Some clients will require adequate insurance before being able to do business with you.
When should you buy insurance?
Whether you’re operating as a sole trader or a limited company, as a business owner the onus is on you to make sure you have the right cover in place for the work you do.
As a general rule, it’s a good idea to get the right level of cover from the moment you start trading or taking on jobs. This is the point at which you become liable for claims, which could occur at any time, regardless of how long you’ve been trading.
What does freelancer insurance cover me for?
Insurance for freelancers can cover you if you make a mistake in your work, if you cause accidental injury or property damage to a member of the public while you’re working, and in the event that a client refuses to pay for work you’ve delivered that they claim to be incorrect or not up to scratch.
There are other things that insurance can protect you against, but this depends on the type of cover you need. Some insurers, like Superscript, will allow you to create a tailored policy, so you only have the right cover (and the right premium).
What insurance do you need as a creative freelancer?
There are loads of different types of cover on the market to choose from, but some may not be relevant to you as a freelancer.
Some covers that you may want to consider are:
Professional indemnity cover: clients pay for your knowledge and expertise, but what if you make a mistake? This is what professional indemnity insurance is for. It can also protect you against contract and intellectual property disputes.
Media liability cover: if this isn’t included in your professional indemnity, it’s a good idea to get it as it covers accidental copyright infringement, breach of confidentiality, right to privacy and breach of comparative advertising regulations.
Public liability cover: whether you’re working from a home office, coworking space, a client’s office or even out and about, public liability insurance provides protection if you cause accidental injury or property damage to a member of the public while you’re working. A member of the public may trip and injure themself on a piece of your equipment, for example.
Business equipment cover: be it a laptop, phone, filming or other technical kit, having equipment stolen or damaged could leave you unable to work and out of pocket. This type of cover should replace or repair your broken or stolen equipment so you can get back up and running quickly..
Legal protection insurance gives you access to specialist commercial legal support if you ever face a legal dispute or have questions about tax issues, such as IR35.
Cyber insurance: a cover often dismissed as irrelevant to smaller businesses, this type of cover may be relevant for you if your work involves handling client or customer data.
How much does it cost?
Insurance needn’t be expensive. How much you pay will largely depend on the amount of cover you need based on the work you carry out.
Generally, the higher the risk, the more expensive the premium, so jobs that could more easily cause harm to the public, or tools of high value, present more risk and represent a bigger potential payout in the event of a claim.
What information do you need?
Getting insurance cover for your business needn’t be complicated – the whole process can often be done online in a matter of minutes. To complete a quote, you’ll usually need to give the insurer the following information:
Business type – are you a sole trader, limited company or partnership?
What your business does – what type of work do you carry out?
Your business turnover – how much income do you receive for your work?
Where your business operates – do you work solely in the UK or other territories, too?
Details of your employees – if you have any
Whether you have cover in place currently – and if you do, your renewal date if you know it
Depending on what your business does, there may be other information required to get the right cover for your needs.
This article was written in association with our business insurance partner Superscript.
Superscript provide flexible cover by monthly payment which is tailored to the needs of creative freelancers. Wishu’s creative community receive 10% off your business insurance with Superscript and can get covered online in under 10 minutes.