We've spoken about why clients ask you to be insured (tl;dr the client needs to know they won't be out of pocket should the freelancer make a costly mistake), but sometimes the level of cover clients ask you to carry is beyond your needs and budget.
Insurance clauses in client contracts are often a one size that doesn't fit all approach.
They're included in contracts sent to small companies with a number of employees and one-person businesses. This means either the level of cover or insurance products they ask you to have might not fit your circumstances.
It's perfectly reasonable to negotiate terms in a contract that don't suit you. The insurance clause is no different.
Here are some ideas for scripts you can send to your client, which can be tweaked to suit your needs.
If a client is asking you to carry an extortionate level of cover
As a freelancer the request to carry £Xm amount of insurance is excessive. It will also increase my insurance premium by £X. I do agree with the importance of being an insured professional, which is why I am already covered for £Xm. Here are some suggestions. Please let me know which option works best for you:
- Stick with my current level of cover
- Increase my level of cover to your desired amount, but build the additional premium into the project’s budget
- Compromise and meet somewhere in the middle. I can increase my level of cover to £Xm
If a client is asking you to carry employers' liability insurance
As a freelancer with no employees I am not required to have employers' liability insurance. As you know, employers' liability is a legal requirement for businesses with employees should they suffer an accident or injury as a result of their work activities. Since I am a one person business there are no employees I am responsible for, therefore I suggest we remove this from the terms.
I do agree with the importance of being an insured professional, which is why I carry the following insurance (amend as appropriate):
- Professional indemnity
- Public liability