A lot of customers approach us during their policy cycle to increase their level of cover or add other products to their insurance. Usually it’s because they’ve won a new project and the client has included an insurance clause in the contract.
There’s one contract we keep seeing that’s asking for a very high level of cover.
- £10,000,000 of professional indemnity
- £10,000,000 of public liability
- £10,000,000 of employers’ liability
Not only is this going to make your insurance premium sky high, but for most freelancers it’s an unnecessary level of cover.
How should you approach clients when they ask for this level of cover?
Contracts are there to be negotiated
This is a boilerplate contract that the client gives to all contractors—whether they’re large teams with multiple bodies or a one-person business.
It’s perfectly normal to negotiate the terms of a contract, so don’t be afraid to discuss the conditions. In our experience the client is open to negotiating the terms.
Consider asking if you can remove the request for employers’ liability. If you’re a freelancer with zero employees, there’s nobody in your business that’s going to sue you and it could save you £50-£100.
The next option is seeing if they’re open to compromising the level of cover for professional indemnity and public liability.
£10,000,000 is on the high side for a one-person business. Most of our customers have £1,000,000 of cover and our claims data suggests this is sufficient. You can suggest a compromise on a lower level of cover like £1,000,000 or £2,000,000.
In all of the instances where we’ve had a customer approach us about this, there’s only been one client that has stood their ground and not been open to negotiating. Others have been happy to compromise and amend the contract to better suit the freelancer.
Another clause often seen in the contract is that the freelancer should be insured by an insurer with an A.M. Best rating of at least A-. This is something you don’t need to worry about because the insurer With Jack works with is rated A (Excellent).