Good question. There are three key covers for businesses in the UK. They are professional indemnity, public liability and employers’ liability insurance.
Professional indemnity is the most popular cover amongst freelancers (and it’s our speciality). It covers a broad range of scenarios which are applicable to freelancing in the digital sector.
Think mistakes in your code, giving ill-informed advice to a client, copyright infringement, breach of contract. The list goes on.
It’s increasingly common that clients contractually require a freelancer has professional indemnity insurance.
If you provide a service to clients, handle data or offer advice, you should consider this cover.
Cost: Expect to pay around £165 annually for professional indemnity.
Public liability covers compensation for injuries sustained on your business premises, or if you cause damage to third-party property while undertaking work.
I wouldn’t have worked without this cover when I was a freelance photographer. The chance of someone tripping over my camera bag and injuring themselves was too big a risk to take, or accidentally causing damage to a venue I was shooting in. However, it isn’t applicable to all freelancers.
Some freelancers work remotely, handling all client communication via Skype, Google Hangouts etc. If that sounds like you, public liability may be overkill.
But if you have clients visit your office or you work on-site at client premises, you may want to consider this cover. If you work from a co-working space, you may also find there’s a clause in your contract to have public liability insurance.
Cost: Expect to pay around £35 annually for public liability.
This is a legal requirement if you have employees. Failing to buy employers’ liability insurance when you have 1 or more employees can result in a costly fine.
Employers’ liability is similar to public liability, but applies to employees instead of members of the public. For example, a member of staff sustaining an injury or illness as a result of working for you.
Freelancers who work solo are exempt from this, but we’ve had several customers add this to their existing policy as they begin to grow and hire staff.
It’s also a legal requirement for limited companies with 2 directors, each with a 50% share.
Cost: Expect to pay around £60 annually for employers’ liability.
Other Cover To Consider
Contents insurance is another popular type of cover for freelancers. Your tools are your business, whether you’re designing on a 4K Retina iMac or sending emails from your phone.
If your contents were to be damaged or stolen, do you have the capital to replace them? Contents insurance is designed to solve that problem.
If you’re still confused as to what cover you should have, check our our What Insurance? tool. Or you can start with a professional indemnity policy and add to it as and when you grow.
Ashley is the woman behind Jack. A photographer, occasional public speaker and tinkerer of code, Ashley's aim is to simplify insurance. And deadlift 100KG.