Why freelancers need professional indemnity insurance
Posted on 17th September 2020 by Phil Ainley MCIM CMktr
Errors in a completed project that cost your client money, compensation for legal defence costs, a client relationship gone wrong. Business insurance is an important part of a freelancer’s business, yet many freelancers do not see the value that insurance adds to their business, putting their businesses and their livelihoods at risk.
Caunce O’Hara looks at how freelancers benefit from carrying professional indemnity insurance.
Professional Indemnity insurance (PI) is a key type of business insurance protection that most professionals can benefit from carrying. If you provide advice, consultancy and/or designs for clients, then you will need this type of insurance protection to ensured you are covered in the unfortunate case that something goes wrong with a project that results in your client losing money.
The cost of the cover is relatively inexpensive and can save you a money in the long run, especially if a client makes a claim against you alleging negligence in your work resulting in them losing revenue.
If a client claims loss of income or damages due to advice or services that you (the freelancer) have provided, then professional indemnity insurance will provide cover if the client claims:
- You made a mistake in your work
- You did not complete the work to their expectations or the agreed brief
- You caused them a loss of money due to the work you produced.
In today’s litigious world, clients are more willing than ever to pursue compensation through the courts, perceiving freelancers to be financially unable to defend themselves, but with a professional indemnity policy a freelancer is backed by insurers and legal defence.
The PI insurance policy will pay the costs for legal defence of the claim and any compensation awarded to the client. If you do not carry a PI insurance policy, you would be liable to pay for the legal defence and compensation yourself.
Isn’t business insurance expensive?
Business insurance is surprisingly inexpensive and should be viewed as an essential part of a freelancer’s business operations.
The temptation for all freelancers is to upgrade to a new smart phone, or upgrade hardware and software, but none of these will help you if a client is unhappy with your work and makes a claim.
At Caunce O’Hara our freelance professional indemnity insurance starts at only £98.00 per annum (depending on your profession), that is only £8.16 per month!
Call our friendly team to find out more and get your freelance professional indemnity insurance quote today on 0333 321 1403.
Will my insurance policy protect me if I want to leave a contract early?
As a contractor, if your circumstances change, either at work or in your personal life, that require you to end your contract early it is in the best interest of both yourself and the hiring party to make this transition as easy as possible. Read our article covering what the potential implications for a contractor leaving a contract early could be.
Other key insurance policies that freelancers can benefit from to protect their livelihoods.
Public Liability insurance (PL)
Just because you are working from home does not mean you do not need this type of cover. If you hold client meetings on your own premises, whether they are in your office or your home, you will need to carry PL insurance.
PL insurance will provide cover if something you do causes injury or other loss to a colleague or a member of the public. As an example, a visitor to your business premises (this could be your home office) could trip on a mat and suffer an injury. Or you could be working at a client’s premises and spill a drink on a computer resulting in them pursuing compensation for any repair costs incurred.
Tax Enquiry & Legal Expenses insurance with Contract Review
Tax Enquiry & Legal Expenses insurance is a type of cover that Caunce O’Hara are renowned for as expert providers. Read what our clients are saying in our Feefo ratings on our website.
Caunce O’Hara’s Tax Enquiry & Legal Expenses insurance is priced at £75.00 per annum and will provide you with £100,000 of cover (any one claim) for legal representation costs incurred during a tax investigation brought against you.
Coverage is broad and can help with the following:
- Employment disputes
- Employment compensation awards
- Property and landlord and tenant disputes
- Criminal defence
- Tax protection
- Regulatory compliance
- Court attendance costs
- Employment extra protection
- Identity theft
- Contract disputes
The Contract Review is undertaken by our key partners who are tax experts. If you are in any doubt as to the validity and compliance of your contract, especially in view of IR35 legislation, then the contract review can provide you with the clarity you need.
The Contract Review will provide you with an IR35 “Pass” or “Fail”. You will receive a detailed report which considers both your contractual terms and working practices based on case law and unbiased opinion.
The Contract Review is priced at only £60.00 per contract and is available when purchased with a Tax Enquiry & Legal Expenses policy. It could help to save you thousands of pounds if you are the subject of a tax investigation and found to be working inside IR35.
Portable Equipment insurance
If you are a freelance contractor who works on the move, i.e.: you spend most of your working days copywriting in cafes and co-working spaces, or you work on your own laptop at a client’s premises, then it would be prudent to check your current insurance provision, that includes your home and contents insurance.
Not all insurance policies provide full cover as standard for your portable equipment as part of the policy.
At Caunce O’Hara we offer portable equipment insurance cover from as little as £112 per annum as part of the business combined insurance policy (from £212 if you work offshore). The policy which will provide you with £5,000 of office equipment cover, plus a further £1,000 of insurance for your portable equipment such as mobile phone, camera and laptop or tablet, video camera and power cables.
Personal Accident and Sickness insurance
As a self-employed contractor or freelance professional, how would you cope financially if you were unable to work for a lengthy period due to illness or injury?
Personal accident and sickness cover will typically pay a weekly benefit to the insured person while they recover. A lump sum may also be paid out in some serious cases of illness or injury.
Please note, this policy does not cover Coronavirus disease (COVID-19).
Business Travel insurance
Business travel insurance will provide cover to assist if your flight is cancelled, or your luggage is lost in transit, or if you fall ill while away on a business trip abroad. Please note, this policy does not cover Coronavirus disease (COVID-19).
It is important to remember that insurance transfers risk away from you. Its purpose is to help ensure you do not suffer the financial loss. With insurance you do not carry the financial consequences of a claim, your insurer does.
All these types of business insurance are available through our Freelance Insurance Scheme. If you would like a competitive quote, please call our friendly award-winning team on 0333 321 1403 or click to build your own bespoke quote online.
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