March 15, 2022

Do I need business insurance as a freelancer?

Written by Olivia Bufton

Freelance life – it’s all about setting your own priorities, choosing your own projects and the freedom to work when it suits you. You might not even think of yourself as a business, especially when you’re first starting out as a freelancer. We hear this a lot when we mention Dinghy business insurance to new freelancers.

I don’t think I need business insurance. It’s just me, right? I don’t have any staff, I don’t rent an office or workspace, I don’t even have that many clients!”

On a basic level, it’s true that there’s no legal obligation for most freelancers to have business insurance (unless you’re employed in specific professions like solicitors, accountants, architects, chartered surveyors, financial advisers or healthcare professionals). However, we look at it differently. We know that business insurance is a protection policy and an investment in the long-term financial health and security of your freelancing career.

Unfortunately, there are all sorts of things that can go wrong when you’re freelancing and, when you’re working for yourself, there’s no one to have your back. That’s why Dinghy was born – to protect and rescue freelancers in times of trouble. There are a few different types of business insurance that we recommend to our freelancers, each one offering a different protection to see you strong through the sometimes stormy seas of freelance life.

Professional indemnity insurance for freelancers: what is it and why do I need it?

Professional indemnity insurance. It doesn’t exactly roll off the tongue, does it? But you’ll be glad you took the time to learn about it if it saves you stress and money down the line.

Professional indemnity insurance (PI) is there to protect you and your client if things don’t go right on your projects. That could be things like if you make mistakes in your work that cost money to put right. If you offer advice on a decision or strategy that turns out to be the wrong call. If you accidentally breach copyright or commit defamation. Or if you slip up and leak confidential client info. There’s quite a lot that this insurance can cover, so we put together a guide last month which contains some helpful examples if you want to learn more. However, what you really need to know is that, should you be accused of this type of negligence or mistake, Dinghy’s professional indemnity insurance will equip you with a team of expert lawyers to defend the claim and cover any costs, fees or damages due up to the value of your policy limit.

Showing off your proof of PI insurance to your clients can help reassure them that you’re operating as a professional and that everyone is protected against the risks if the project goes wrong. In fact, many freelancer contracts will specify that you must hold a certain level of professional indemnity insurance. If you don’t hold it, not only will you be putting yourself and your client at risk of huge losses, you could also find yourself in breach of contract. That’s stress and hassle that you don’t need – so get PI in place to protect your freelance business.

Public liability insurance for freelancers: what is it and why do I need it?

Also important for peace of mind for freelancers is public liability insurance. Public liability insurance is there to cover the costs of accidental damage to property or injury or harm to other people caused while you’re working. Again, while this isn’t a legal requirement, it is definitely something to consider if you work out and about as a freelancer. Perhaps you’re a wedding photographer who’s in a different venue every week. Or a web developer who travels to meet clients at their premises to understand their needs. Or even just a copywriter who spends the occasional day working from your local cafe. All of these working scenarios hide potential hazards: trips and falls, injuries from lifting and damage to expensive equipment.

Similarly, if you host clients or other people in your premises, public liability insurance will protect you if anything should happen to them while they’re in your workspace. If an accident is deemed to be your fault – your trailing laptop cable they tripped over, your handbag that knocked over an expensive vase, your heavy camera equipment they tried to lift – you could find yourself facing a public liability case for damages and compensation. These legal battles can incur high costs, particularly if people’s injuries mean they can’t work while they recover. It can be a really stressful thing to face as a freelancer. Having public liability insurance from Dinghy means that you’ll get an expert team of lawyers to support you, build your case and liaise with the other side, freeing you up to continue working. As well as this, we’ll cover any fees, compensation due up to the limit of your policy – usually a minimum of £1 million.

Business equipment insurance for freelancers: what is it and why do I need it?

When you’re a freelancer, every working minute is precious. There’s nothing worse than needing to get on with projects and being hampered by other things. Which is why our business equipment insurance, as well as covering your business essentials anywhere on the planet, offers a 24 hour replacement policy. If your laptop is stolen, we’ll get a new one in your hands or the equivalent cash in your bank within 24 hours, so you can get back to work. Our policy covers any equipment owned by your business, which could be computers, tablets, phones, cameras, musical instruments – whatever the tools of your trade are.

Freelancer Assist: back-up and invoice-chasing for freelancers

If insurance is a protective shield, Freelancer Assist is your trusty sidekick, there so you don’t have to face any of the trials and tribulations of freelance life alone. We provide support to our freelancers through legal, tax and counselling helplines. We’ll also back you up with chasing unpaid invoices, getting an expert team to recover the debt for you if you’re having no luck getting your clients to pay up.

How do I set up business insurance as a freelancer?

Sorting out your business insurance with Dinghy is as easy as 1-2-3. Simply head to our website, pop in a few details about your freelance business, and we’ll send a quote straight to your inbox. Prices start from just 30p per day, and with our unique flexible cover you can pause your account so you only pay for the hours you work – not when you’re on holiday or between jobs. Remember business insurance counts as an allowable expense in the UK under HMRC’s Self-Assessment Tax rules, so you can deduct the cost against your takings. Find out more in our blog about claiming expenses as a freelancer.

About Olivia Bufton

Read more blog posts by Olivia Bufton


Subscribe to our exclusive mailing list for the latest stories, newsletters and freelancer tips from the Dinghy team