Which insurance policies protect freelancers and contractors?

According to recent statistics, there were approximately 4.37 million self-employed people in the UK in the three months leading up to January 2021. Self-employment grew from a low of 3.2 million in December 2000 to a peak of 5.03 million in the beginning of 2020¹.

People are pursuing their passions and starting their own small businesses at an increasing rate every year, yet many begin trading without vital business insurance protection because it’s so easy for someone to have an idea, register a new business online, and then begin their self-employed venture.

Some new start-up business owners aren’t even aware of the consequences of being self-employed without insurance. Whilst others have a preconceived notion that insurance is expensive.

We’ve highlighted five of the key policies freelancers and contractors should consider from the outset and why they’re important.

1. Professional Indemnity Insurance

Professional Indemnity Insurance (or PI as it is sometime known) is a key policy for most professionals who provide advice, consultancy and/or designs for clients. Cover is relatively inexpensive but can save you a lot of money in the long run, especially if a client makes a claim against you alleging negligence in your work that resulted in them losing money.

The policy will cover your legal costs, as well as compensation payments that may be due, as the result of a claim against you. Without this type of cover you would need to pay for your defence out of your own finances.

2. Public Liability Insurance

Public Liability Insurance (PL) is an essential type of cover if you deal with clients and/or members of the public, this includes if you work from home. If you hold client meetings on your own premises, whether it’s in your office or your home, you need to carry PL Insurance.

PL Insurance will provide cover for the cost of a claim made by a member of the public in the event of an accident that causes them harm or damage to their property.

An example of this could be: A visitor to your business premises (this could be your home office) trips on a mat and suffers 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.

3. Legal Expenses Insurance

Legal Expenses Insurance will provide you with up to £100,000 of cover (any one claim) for legal representation costs incurred during the defence against a claim made against you, and is available from as little as £5 a month. The policy also enables you to access 24-hour legal advice via our helpline.

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 including jury service
• Employment extra protection
• Identity theft
• Contract disputes

When you arrange your legal expenses insurance with Markel, you will also receive access to:

• 24 hour legal advice helpline – giving you immediate access 24/7 to an experienced team of qualified solicitors at no additional cost. The team at Markel Law are on hand to help you with any business-related legal queries.
• Markel Law Hub – an online resource of legal and business guides, templates and content written and created by our team of expert solicitors. Instantly download ready-made contracts, policies, procedures and guidance you can use to run your business with confidence - without paying any expensive legal fees.

4. Occupational Personal Accident Insurance

As a self-employed professional, how would you cope financially if you were unable to work due to an injury sustained while you were working? Personal Accident Insurance is popular with freelancers and contractors who do not receive sick pay and is available from £5.00 a month.

The policy will provide cover for a wide range of incidents such as:

• You slip at work, suffer a leg injury and are unable to work for 6 months. The cover will pay you the weekly benefit stated in your policy (subject to a two week deferment period).
• You are involved in a serious accident at work which results in you losing a limb. Occupational personal accident insurance pays the lump sum stated in your policy.

5. Business Equipment Insurance

Business Equipment Insurance is provided as part of the Markel Direct Office Insurance policy and covers against loss, theft and accidental damage to equipment that is vital to your business. This includes technologies that you take with you while undertaking your business, such as laptops, tablets, mobile phones, cameras and projectors.

This type of insurance is particularly beneficial to freelancers and contractors working on location, away from their premises, such as photographers and film-makers, IT contractors, and freelance copywriters and marketers.

Office insurance starts from as little as £6.00 a month and also provides cover for your office premises and for business interruption.

All of these types of business insurance are available on our website, simply click the quote button below.

Sources:

1. https://www.statista.com/statistics/318234/united-kingdom-self-employed