Freelance Insurance – A Complete Guide to the Insurance Products a Creative Freelancer Might Need

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One of the best things about being a freelancer is the control you have over your working life. However, this means you have a lot of other responsibilities - including arranging insurance.

Freelancing comes with a lot of benefits. You are in control of what jobs you take on, where you work and how long you work each day. The flip side is, if something goes wrong it’s down to you to sort it out – and without a safety net in place that can be expensive.

Whatever industry you work in, it’s important to make sure you are protected against all eventualities – so you can keep on doing what you do best.

What types of insurance do freelancers need?

There are many different types of insurance options available to creative freelancers – whether you are a photographer, web designer, writer, makeup artist, fashion designer or anything else.

Some freelancers opt for full peace of mind and buy annual policies so they know they are always covered. Others choose to buy insurance on a more flexible short-term basis, only paying for cover for specific jobs or projects. A lot of freelancers only start to think about insurance because a client has requested they have a certain policy in place before they can work with them.

Whatever your freelance insurance needs, Mode Insurance is here to help. We’ve listed all of the different types of insurance that freelancers could need below, and explained exactly what cover they provide:

Public Liability insurance

If you are a freelancer who regularly meets or visits clients in person, then Public Liability insurance is often recommended. This type of insurance covers you if a client, customer or member of the public has an accident or is injured either on your business premises or as a result of your business activities.

Public Liability insurance offers cover for the legal costs incurred if someone claims against you, as well as any compensation pay-out. Before buying Public Liability insurance, you need to carefully consider whether it is relevant to you and your freelance business – if you always work from home and have little face-to-face interaction with clients, then you may not need it.

However, if it is relevant to you then the level of protection and peace of mind it offers could be invaluable.

Find out more about Public Liability Insurance for Self-Employed Creatives

Equipment insurance

Many freelancers have a lot of expensive equipment they need to do their job, and if something should happen to it, they could find themselves unable to work, unable to earn and unable to pay the bills.

With Mode Insurance, freelancers can insure all their work equipment up to a total value of £50k – whether it’s the laptops and tablets you use for work, your cameras and other photography equipment, make-up and cosmetics, musical instruments or anything else. If you use it to conduct your creative freelance business, then you can cover it against accidental damage and theft with Mode Insurance.

Find out more about our Business Equipment Insurance

Professional Indemnity insurance

Sometimes called professional liability insurance or just simply PI insurance, Professional Indemnity insurance covers any legal costs and expenses you incur if a client takes legal action against you.

It may be rare, and as a freelancer you may feel that it will never happen to you, but all it could take is one client to allege you have provided inadequate advice or your service has caused them to lose money and you could face a lengthy, time-consuming and expensive legal battle.

Professional indemnity insurance can provide peace of mind that your creative freelance business is protected against potentially damaging legal costs and compensation payouts.

Find out more about Professional Indemnity Insurance for Self-Employed Creatives

Product Liability insurance

Many freelance businesses involve either selling products to the general public or being involved in the design, manufacture or distribution of products.

If your work revolves around creating and selling products, then you might need Product Liability insurance to protect you against damage or injury claims from a product you sell. Whether you were originally involved in the manufacture of the product or not, your freelance business could be held liable.

Property and Contents insurance

Whether you work from home or have some form of business premises such as an office, studio or workshop, you may want to consider insuring the contents. Property and contents insurance for creative freelancers and the self-employed covers all the contents associated with your business, which could be computers and other technical equipment as well as stock, samples, goods held in trust, precious metals and so on.

This form of insurance will also cover you for stolen or damaged computers and office equipment, the repair or replacement of broken glass and replacement locks, the recovery of data from lost or stolen devices and much more – giving you complete peace of mind that your freelance business is financially protected should the worst happen.

Tax Investigation and IR35 insurance

IR35 refers to two sets of tax legislation that could affect freelancers. IR35 was introduced by HMRC to tackle the growing issue of what they call ‘deemed employment’, which is when a worker is effectively an employee of a business but works for them on a freelance ‘consultant’ or ‘contractor’ basis. This is done so the employer doesn’t have to offer employment rights and benefits to the employee, and can also avoid paying National Insurance Contributions (NICs).

If a self-employed worker is investigated under IR35 and found to be a ‘deemed employee’ then they could be forced to pay PAYE and NICs – which could reduce their net income significantly.

As well as IR35 investigations, all freelancers could find themselves the subject of a tax investigation and may not feel confident and knowledgeable enough to deal with it alone.

Tax investigation and tax liability insurance policies are available to help offer protection against the financial disruption caused by HMRC taking such action against you.

Find out more with our guide: What is IR35 Insurance and is it Worth It?

Income Protection insurance

As a freelancer you are exposed to the risk of lost earnings as soon as you fall ill and are unable to work.

Unlike permanent employees who have benefits like Sick Pay and Holiday Pay, self-employed workers have to absorb these costs themselves – which can leave them in financial difficulties if they suffer a long-term illness or injury.

Income Protection insurance is available to act as a safety net for freelancers, paying a monthly income (after an initial waiting period) to cover the loss of earnings caused by a long period of illness or injury.

Life insurance

One of the benefits available to permanent employees is a ‘death-in-service’ benefit, where employers pay-out between 2x and 4x of the employees’ salary to their chosen beneficiaries if they die while employed by them. As freelancers do not have access to this type of benefit, it is important that they consider a form of life insurance if they have any financial dependents.

If your freelancer income is used to pay some or all of a mortgage or to cover household bills etc. then the loss of your income should the worst happen could have a dramatic effect on your family’s finances and lifestyle.

Life insurance can, therefore, act as a safety net and provide peace of mind for your family that, should something happen to you, they will at least be able to pay the bills.

Private Health insurance

As self-employed freelancers are not eligible for Statutory Sick Pay (SSP), they are under even more pressure to get well and back to work as soon as possible. Health insurance – or Private Medical Insurance – can help you access treatments and specialist doctors/consultants that could help you recover and get back to work quicker.

Health insurance is particularly useful for fast-tracking surgery that may be over-subscribed on the NHS, helping you avoid long waiting times that could severely impact your earnings.

Cyber and Data Risk insurance

Keeping data secure is a must for freelancers these days – whether it’s your own personal data or sensitive customer data. If any of your online accounts are targeted by hackers, if you’re hit by an IT failure or if you share something you are not supposed to, then it can take valuable time and money to rectify the situation.

Cyber insurance, sometimes called cyber liability insurance or data protection insurance, makes sure your business is protected against cyber-crime like fraud and data theft, helping you recover from attacks and recover any lost data.

To find out how Mode Insurance can help cover your creative freelance business, get a FREE online quote today:

Any views or opinions expressed above are for guidance only and are expressed in generic terms. They are not intended as a substitute for readers taking appropriate professional advice relevant to individual circumstances. We would always encourage readers to seek professional advice.

Written by

Luke Glassford

Marketing Director

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