Sometimes Client Relationships Or Projects Don't Go To Plan
Professional indemnity covers a broad range of risks. Any freelancer offering advice or providing a service to a client should have it.
Client relationships can be unpredictable, as can the outcome of a project.
- Human error can result in careless mistakes
- Late delivery of a project can result in a client's loss of income
- Designers are vulnerable to claims of copyright infringement
- Contracts can be accidentally breached
Professional indemnity also pays your legal expenses in the defence of a claim. If a client was to pursue legal action against you, the insurer appoints you a team of legal experts and you have piece of mind the financial burden is on your insurer.
From our experience, most situations arise as a result of a client relationship gone sour.
It's A Contractual Requirement
A lot of clients contractually require insurance. They won't hire a freelancer for a project without it. It's increasingly common for contractors to be asked for proof of insurance.
Depending on the job, some clients require professional indemnity insurance. Other contracts require public liability.
Don't miss out on potential work because you're uninsured. It's also best to avoid scrambling to get cover sorted when a lead comes in. This could lead to you not having suitable cover.
Meet contractual demands from day one.
Being Professionally Insured Builds Trust
Building trust with clients is a freelancer's priority. You do this by reviewing your client's needs, delivering good work and being reliable.
Having insurance also improves client confidence in you.
Business insurance is a badge of trust. It ensures there's minimal disruption to business and client work if there's an accident or mistake.
There are many risks freelancers face. These risks could cause you to lose money and even close up shop altogether. With insurance in place, it shows the client you're in a stable position even if something was to go wrong.
You'd be able to continue client work because you're professionally insured.
A Contract Isn't Enough
A common statement I hear is, "I don't need business insurance. I have all my clients sign a contract!".
A contract is believed to alleviate a freelancer of responsibility, but this simply isn't true. It may lay the foundation of what duties are to be expected of you as a contractor, but insurance steps into action when those duties come into question.
A contract doesn't pay your legal fees or compensation. Insurance does.