June 4, 2021

Do freelancers need insurance?

Written by Martin Baxter

Business insurance? But I’m just a freelancer!

Oh, there’s no such thing as “just” a freelancer. Freelancers contribute £145 billion per year to the UK economy, and the Centre for Research on Self-Employment (CRSE) reported in 2019 that “productive and dynamic” freelancers play a “vital role in the economy”, giving businesses access to “invaluable flexible expertise”.

However, this is something we hear relatively frequently from prospective customers. I’m only a freelancer. I don’t have any staff. I don’t even have many clients. Do I really need business insurance?

Is freelancer insurance a legal requirement?

Like many questions in life, the answer isn’t a straightforward yes or no. Legally speaking, it’s not usually a requirement for freelancers to take out insurance (unless, indeed, you do have staff working for you). And let’s face it, times are tight, and no one wants to be forking out unnecessarily. However, if a mistake or accident happens in the course of your freelance work, the costs of operating without insurance could be hefty indeed – running into thousands or even hundreds of thousands of pounds.

Insurance is there to protect you in case something happens. We’re the first to admit, it’s not the most glamorous industry. But it’s a safety net. If you’re a graphic designer employed by a company, and you make a mistake on the layout of a client’s leaflet that means they have to reprint the entire run, your employer (and their insurer) will foot the costs. You, as an employee, would be protected.

Freelance insurance as a sole trader

But this is not the same when you’re freelance. If you’re a sole trader without insurance, you could find yourself personally liable for claims against your business, putting your livelihood, savings and even your home at risk. No one needs that kind of stress and aggro in their life, which is why we always recommend that anyone running a freelance business – however small and insignificant you think you are – gets insured.

Business insurance can be a bit of a minefield, and some policies can seem eye-wateringly expensive if they are tailored to larger or higher-risk occupations. That’s where Dinghy comes in! Our insurance products are all designed for freelancers and only freelancers, meaning we can offer you low-cost, flexible policies that cover the things you need – and nothing that you don’t. Here is our expert run-down of some of the most common types of business insurance that freelancers should consider:

Professional indemnity

Professional indemnity insurance is all about guaranteeing your work – almost like providing a warranty. A PI policy will protect you if a client claims that you made a mistake or were negligent in the course of your work for them. This could be anything from typos, giving bad advice or getting the dimensions wrong on an architectural plan. A professional indemnity policy from Dinghy will also cover other legal slip-ups like a breach of copyright, defamation and confidentiality leaks. Dinghy’s policies not only cover the money being claimed by the client and the associated legal fees, but your case will be passed to a dedicated legal team, taking the stress and hassle of dealing with the claim out of your hands, so you can carry on working with no distractions.

Another thing to note is that, while it might not be a legal requirement for freelancers to hold this type of insurance, many client contracts will specify that you must hold it up to a certain amount, so if you don’t take it out you may be in breach of contract. Even if it’s not specified in the contract, clients love to see evidence that their freelancers carry this insurance, as it shows they are a low-risk and conscientious hire.

Public liability

Public liability claims can sound even scarier than professional indemnity ones – because these are the ones where someone gets hurt or their property damaged. Your occupation might seem quite low-risk, especially if you work from home a lot, but for anyone who is working out and about, visiting clients’ premises or dealing with other people in the course of their freelance work, we recommend public liability insurance. Our policies cover all the costs for damages and legal expenses if there’s an accident and someone or something is harmed. Hot coffees, trailing cables and handbag straps can all be occupational hazards of freelance life. PL insurance means that we can take care of things if an accident happens.

Business equipment

Whatever the tools of your trade – laptop, camera, smartphone, tablet or musical instrument – it’s safe to say you’d struggle to meet your deadlines without them. Business equipment insurance from Dinghy will guarantee to replace your gear or send you the cash to replace it within 24 hours. We can cover any piece of equipment that you use for your work, anywhere in the world, providing it is owned by your business. For freelancers, it’s not just the cost of replacing equipment that might be a barrier if it got lost or damaged – it’s the days of work and agitated clients when you tell them that you can’t deliver their project on time. Business equipment insurance from Dinghy means that you can get back to work ASAP.

Now that this rundown has given you a better idea of which insurances you need for your business, the friendly team at Dinghy would be happy to give you a quote for the cover you need. Our freelance insurance policies are fast, flexible, responsive, and there when you need them. You can answer a few simple questions online and get a quote in seconds, direct to your inbox. As a bonus, all our policies come with Freelancer Assist, a unique service that will help you chase unpaid invoices and give you access to expert legal, tax and counselling helplines. We also understand that freelance life has its ups and downs, which is why all our policies can be switched into “lite” mode when you’re not working, reducing your monthly payments at the click of a button. Perfect business insurance, especially if you’re just a freelancer.

About Martin Baxter

Read more blog posts by Martin Baxter


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