We receive so many queries from professionals and creatives that are planning their future as a freelancer. Most believe Professional Indemnity is the only insurance cover they need, but that’s not usually the case.
Self-employment continues to rise in popularity, with research showing there were more than 4.25 million self-employed people working in the UK as of March 2024 – and almost half of them were freelancers.
Becoming a freelancer may bring more freedom, but you still have responsibilities, not only for the day-to-day running of your business, but ultimately for any liability too. You’ll need to understand the insurances you require so you and your business are protected.
Professional Indemnity, or PI as it’s commonly referred to, is the most common type of insurance freelancers enquire about. If you’re an architect or solicitor you’d see this as a core cover – but what about freelancers in other sectors? There is an ever increasing group classed by insurers as ‘miscellaneous’ -anyone who offers advice or consultancy for a fee is deemed to be a professional and therefore has an exposure to a professional negligence claim.
In addition to the ‘miscellaneous’ businesses there are those who may perceive they have no professional negligence exposure, but who have a contractual liability requiring them to have a PI policy in place. These businesses often have a ‘contingent liability’ as although they do not provide professional advice or consultancy directly, they sub-contract this activity and remain the first port of call in the event of a problem or claim.
You may feel confident in the quality of your work, and the advice or service you provide, but anyone is vulnerable to a claim if they fail to meet a client’s expectations.
A PI policy will offer cover compensation you may need to pay to correct a mistake, or any legal costs due to negligence, such as giving incorrect advice or making a mistake in your work. It can also cover the legal defence costs and expenses incurred in defending your position against an alleged claim/claims for financial loss.
Areas where you or your business could be exposed may include:
– Professional negligence
– Breach of confidentiality
– Loss of documents
– Infringement of copyright
Dependent on your type of work, who you work with and where, there may be other insurances you require in addition to any trade specific insurances. To ensure you’re fully protected, always speak to a specialist that takes the time to understand you and your business.
Wilsons have helped countless professionals and freelancers rectify ineffective insurance cover and set up comprehensive and cost effective programmes with a top quality consultative approach.
If you’re thinking of becoming a freelancer, or you’d like to ensure you have the right cover in place, just get in touch with Charlotte Perkins