To many, the lure of working for yourself is too great to ignore but before you take the plunge and go self-employed, it’s important to ensure you are fully aware of the risks you will be exposing yourself to and how you can protect yourself against them to ensure your self-employed career is a success.
When you start-out as self-employed, it is likely that you will use the same laptop for your work as you do for your personal use. Imagine the situation you’d find yourself in if your laptop was stolen?
Working in an internet café is common practice for the self-employed. It takes you out of your home and away from home-life distractions. But if you need to run an errand or go shopping, then it is a good idea to carry your laptop with you (but that’s heavy and bulky) or drop it off at home first.
Many times, people have left valuables in their car while just nipping into a shop, then when they have returned to their vehicle, they find that they’ve been broken into and their laptop and other valuables have been taken.
If this happened to you, how would you cope knowing that you’d not only lost your work but also potentially compromised your access to your bank account and social profiles as a result?
You can mitigate this risk by having two devices, one for your personal life and the other for your work. If you purchase a laptop specifically for your work, it can be declared in your accounts as an expense.
You can also insure against this type of occurrence with portable equipment insurance, which offers protection to people who work on the move and carry their office in their laptop bag.
Identity theft and cyber crime take their place in the news on a regular basis. If you’re self-employed and you work on-site for a client or you work in an internet café, then you might be exposing your sensitive data (and your client’s data) to cyber theft.
Typically, public Wi-Fi connections aren’t secure and sophisticated cyber criminals can use them to piggy-back into unsuspecting people’s lives, compromising data and cloning identities for their own gain. Wherever possible you should try to use a secure network or simply work offline if you are working in a public place.
You can insure yourself against the impact of identity theft with legal expenses insurance (LEI). The LEI policy will respond to cover (up to £100,000 in any one claim) unauthorised use of your personal data by a third-party and will pay costs to reinstate or correct your personal information. It will also cover an incident where a third party has entered a contract in your name or on your behalf without your permission and will pay costs to help you withdraw from that contract.
Prevention is always better then cure to avoiding the stress that can be caused by identity theft and the fallout from it. It is important to be as vigilant as possible when you are working online.
When you are self-employed, whether that be as a marketer, designer, copywriter, café or shop owner, if you meet people face-to-face as part of your work then you risk a potential public liability claim.
You might meet a client at your home office or you may work for a client on their premises.
If you meet clients on your property and they fall and hurt themselves, then you could face a claim for the injury if you are not covered.
If you work on a clients’ premises and you damage property of theirs or if you work on a laptop and a member of staff trips on your laptop cable, then you could also face a public liability claim.
As a self-employed professional it is important to ensure you are covered with public liability insurance because the alternative, should a claim be made against you, could run into thousands of pounds that you’d have to pay out of your own pocket.
Many self-employed professionals offer one of three main services: professional services, advice and/or designs to their clients. All three of these services are open to misinterpretation and human error, which can lead to a claim of negligence on your part if you’re not careful.
If you are subject to a claim of negligence that is alleged to have cost your client money, then settling the claim could cost thousands of pounds in compensation and in costs to put the job right again. This is why professional indemnity insurance (PI) is the most popular type of business insurance for freelancers and contractors.
If a claim is made, then the PI policy will respond to protect the person carrying the policy. The PI policy works on a ‘claims made’ basis, which means it must be live at the time the claim is made.
Self-employed professionals who benefit from carrying professional indemnity insurance includes but is not limited to:
As a self-employed professional you are likely to encounter times when you are extremely busy. Feast and famine can be common in certain freelance sectors. It’s important to learn how to manage workflows and output.
Outsourcing is a great way of ensuring projects are completed on time and hiring freelance contractors to help you with projects is a great way of creating reciprocal working relationships. However, outsourcing comes with its own risks.
If you hired a contractor online or even if it was someone you knew and trusted, you could be exposing yourself to the risk of them not completing the work for you on time or not completing it at all. Therefore, it is important to ensure the contractor you hire is also carrying professional indemnity insurance, just in-case you need to make a claim against them.
You can mitigate this by insisting on no payment until the work is delivered or by working to staged payments. Many freelance contractors will insist on a deposit upfront, it is important to ensure you have a rock-solid contract in place with them before making the deposit payment.
Sometimes it is a good idea to think our work activities and ask if they pose a health risk to others. As a self-employed professional, you might look to employ staff. If so, then you will be required by law to carry employers’ liability insurance (EL) to ensure the welfare of your staff.
Even if you do not employ staff, you might legally still have to follow the Health and Safety at Work Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015.
Example scenarios of when the law applies to self-employed professionals includes:
For quotations for professional indemnity insurance, public liability insurance, employers’ liability, insurance, legal expenses insurance or portable equipment insurance, please call us on 0333 321 1403.
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Protects against claims of alleged negligence in your professional services, advice and designs.
Protects against claims of injury to third-parties or damage to a third-party's property.
Cover for contract disputes, tax investigations, court attendance, debt recovery, and more.