Have you ever lost out on a project to a cheaper freelancer? Your hourly rate eclipses their daily rate, but there's a reason for that.
You have years of experience, a roster of happy clients and a talent you've been honing for years. You've worked on projects similar to this with great results. You know you're a better suited candidate for this job.
Yet it doesn't matter. The client has based their hiring decision purely on budget, so they choose the cheapest freelancer—even though they're not quite right for the job.
Forgive me for comparing buying an insurance policy to hiring a freelancer, but I see similar sentiments in insurance. Freelancers choose the cheapest policy even though it's not the best fit for their work.
You've heard the expression, "You get what you pay for". This mantra also rings true for insurance. Whilst it's a good idea to use budget to inform what level of cover you choose, basing your insurance purchase solely on price is problematic for a few reasons:
When only looking at the price of the premium, you ignore the most important factor—policy features. If one policy is dearer it could be because the level of cover is more comprehensive. Does your policy cover you for everything you want it to?
With a cheaper product can you feel confident your insurer will pay out in the event of a claim? We all hope we'll never have to call on the services of our insurance provider, but when we do it pays to have a good policy.
A premium price usually means a premium product. There is much more to insurance than just the policy. What about customer service?
I get it. I may work in insurance, but I'm also in the market for buying it and I used to be a freelancer.
It wasn't until I started working in insurance and helping freelancers through horrible situations I truly understood the importance of being properly insured. Whilst there is the temptation to cut corners and keep your fingers crossed you'll never have to find out if your policy will work for you, putting price first can be a costly mistake.
So, what can you do?
Instead of approaching insurance with the mindset you're throwing money down the drain, consider your insurance premium an investment in your confidence. Confidence to stand up to clients. Confidence to navigate difficult projects. All it takes is for one bad client to make your insurance worthwhile.
Secondly, when shopping for insurance ask the provider what features their policy has that others don't. The professional indemnity policy we arrange includes third-party cyber liability which freelancers usually have to buy a separate policy for.
Lastly, if you're new to freelancing and mindful of your outgoings you can opt for a lower level of cover and increase as your turnover grows. This is called a mid-term adjustment and we don't charge any admin fees to do this, meaning your policy is as flexible as you need it to be.
The price of insurance varies between providers, but the true cost of a cheap policy could be devastatingly expensive.