If you’re working for yourself in any form, whether as a freelancer, contractor or self-employed person, you are going to need appropriate insurance cover. We know it’s not the most exciting subject, but trust us, you do need it. Here we give you a quick run through of what you should
Professional Indemnity (PI) cover
This is a must for anyone providing any sort of advice or consultancy services. If you make a mistake in your work and your client loses money and sues you, your professional indemnity insurance can cover the compensation claims and legal costs. Due to the potential risks of receiving poor advice, some clients will insist on you having appropriate PI cover before they will engage you to do any work.
Public Liability (PL) cover
Public liability insurance protects you against compensation claims for injury or property damage to a third party, whether at your premises or elsewhere. It’s essential for certain activities such as filming or events and an obvious choice for certain trades such as builders, plumbers etc. It also protects you whilst you’re out and about on business. Some client contracts require a particular minimum level of PL cover so make sure you check the detail.
Employers Liability insurance
If your business employs staff then it is very likely that you are legally required to have employers liability insurance. (There could be exceptions if you only employ close family members so seek advice for your particular circumstances.) Employers liability insurance protects your employees if they suffer injury, illness or damage as a result of their work. Even if you don’t have permanent employees, but occasionally hire staff, seasonal workers or use temps, you will still need to take out cover. You can be fined £2,500 per day if you do not have suitable cover.
You should ensure you have appropriate cover for your business items, equipment, tools or other contents within your business premises. If these are damaged, destroyed, lost or stolen your insurance should cover the cost of replacement or repairs. If you work from home don’t assume
your business items are covered on your domestic contents insurance policy. If you store anything in a vehicle, even for a short period of time, you should ensure you have appropriate cover on your car insurance.
If you use your car for work-related journeys then you should consider getting appropriate cover for business use. Most domestic car insurance policies are for “social, domestic, pleasure and commuting” only – meaning that any other journeys are not covered, including to ad hoc meetings, trips to pick up stock or equipment etc.
Personal accident, critical illness, and life insurance
Personal accident insurance covers injury or death caused by an accident and can pay out for lost income, medical costs and hospitalisation depending on the specifics of your policy. Life insurance and critical illness cover are also worth considering for freelancers and self-employed people where the business (and your income) would be seriously affected in the event of critical illness. Policies are available that have been specifically designed for self-employed people.
Business interruption insurance
If your business could be disrupted by material damage caused by an event such as flood or fire then this business interruption insurance could provide you with the finances to cover the consequential loss of revenue.
Directors & Officers (D&O) insurance
Even though directors of limited companies have “limited liability” for their legal obligations, there are situations where a claim could be made against you as an individual. D&O insurance exists to cover financial outcomes such as the legal costs to defend an accusation of some kind. In general, D&O insurance covers non-deliberate acts committed by company directors or officers that are in some way illegal or not in the best interests of the business.
Umbrella or agency worker?
If you are an agency worker or umbrella employee you should be covered on their professional indemnity, public liability and employers liability insurance policies. Some might offer additional insurances such as personal accident cover.