What Insurance Do I Need As A Freelancer?

As a freelancer, insurance is essential to protect yourself from a number of different risks that you face, such as public liability, product liability and professional liability. Without insurance, you’re potentially leaving yourself open to legal action should things go wrong, which can be devastating to any freelancer. Taking the time to look over your insurance options could be one of the best business decisions you ever make.

Insurance cover for freelancers

The risks you face as a freelancer are unique, depending on your line of work. However, certain policy types tend to be more popular than others – from protection against compensation claims to added security in case of ill health. So, what freelance insurance do you need? Here are some of the more common types of cover for a freelancer.

Public liability insurance

According to NimbleFins, freelancers should have public liability insurance if they deal in person with members of the public, such as customers or clients. You could be protected with this insurance type if you be sued by someone claiming an injury or accidental damage due to your work.

Even if you’re a home-based freelancer, all it would take is for a client to visit and trip over some work equipment. The client could then blame you for their injury and sue you, which can be very expensive to defend. Without insurance, it could spell financial disaster.

With public liability insurance in place, you could have your legal expenses covered if you need to defend your business. If you’re then found to be liable for the claim, any compensation could also be covered by the policy.

Product liability insurance

Product liability insurance protects freelancers against property damage claims or bodily injury because of products you manufacture, design, repair, or sell. It often works as part of your public liability policy, giving an extra layer of protection.

For example, a customer may become ill after eating food you prepare and sell. They then blame you for food poisoning. In this case, product liability insurance can cover the legal defence and compensation costs.

Professional Indemnity Insurance

Professional indemnity insurance protects freelancers who sell advice or professional services. If you worked for a client who faced financial loss and decided to claim negligent advice, you could be sued.

However, professional indemnity insurance could help to cover the cost of any legal bills if you had to defend yourself against a claim.

Do I legally need business insurance?

The only insurance type you’re legally required to take out is employers’ liability insurance. But, it won’t apply to everyone. You only need to take out an employers’ liability policy if you employ other workers – even on a temporary or casual basis.

Employers’ liability insurance will protect you if a current or former employee is injured or becomes ill in the line of work. For example, they contract a serious illness due to their working environment or simply trip over and blame you. If they choose to sue you for negligence (e.g., not providing a safe work environment or training), the policy could cover your legal fees as well as any compensation.

As it’s a legal requirement, there are serious fines of up to £2,500 per day for not having this essential insurance. With a high minimum level of cover required by law – at least £5 million – it may be a more expensive type of insurance compared to others.

Health insurance for a freelancer

As a freelancer, you don’t get sick pay, so the right insurance can be critical for that extra security. There are two common policy types you could consider: private health insurance and personal accident insurance.

Private health insurance

Private health insurance helps you get back on your feet and earning money as soon as possible. Without sick pay or income protection, private health insurance could mean you skip lines and get treatment quickly in a private hospital.

There are two things to consider when choosing your health insurance policy: inpatient and outpatient cover. Inpatient cover is usually the standard with these policies, which covers treatment within the hospital that requires a hospital bed, such as surgery or tests.

The outpatient cover is often an optional extra. This will help cover access to diagnostic tests, scans, and consultations in private hospitals and other treatments, not requiring a hospital bed.

Let’s look at an example. You go to see your GP after you face an illness that has stopped you from working, and they refer you to a private hospital for immediate tests. With outpatient cover, the insurer will cover these costs. If it turns out you need inpatient services such as surgery, the policy could also cover this.

Personal accident insurance

Personal accident insurance can help replace lost income if you can’t work due to an injury. While this isn’t health insurance per se, it’s an excellent way to provide extra income security should an accident occur.

This type of cover will pay you a sum of money to help replace lost income, usually as a weekly amount or a lump sum. With almost 700,000 workers sustaining a work-related injury annually, personal accident insurance could be essential for you to consider. After all, if you can’t work, you can’t earn.