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March 10, 2022

Does a freelance developer need insurance?

Written by Jack Lewis

Freelancing is a great career move as a developer. It lets you opt-out of crunch culture and choose a better work-life balance. As a freelance developer, you can set your own work hours, pick the projects you want to work on, and demand a fee that matches your level of experience, training and skill. But a move to freelancing should also be taken with your eyes open – and that means knowing that working self-employed does come with an extra set of risks and responsibilities that you need to think about before you start working.

If you work for an employer, you’ll be covered by their own business insurance if things go wrong during your work. But when you’re freelance – unfortunately, you’re out on your own. Luckily, there are specialist insurance products like those from Dinghy tailored especially to the needs of freelancers. All Dinghy policies are low-hassle, low-cost and flexible – because we understand the ebbs and flows of freelance work. But why do you need insurance? And exactly which of these confusing-sounding policies should you be taking out? Let’s take a closer look at business insurance for freelance developers.

Professional indemnity insurance

Professional indemnity insurance acts almost as a guarantee of the quality of your work. Even if you’re extremely careful, mistakes can happen when you’re developing which mean that the finished product might not be exactly what the client wanted. If they think that your negligence or bad advice has caused them financial loss, they may try and bring a claim against you in a civil court. Ditto if they think you have breached confidentiality, committed defamation or used copyright material without permission.

Claim example: A client has asked you to create a bespoke e-commerce app to help their customers shop online and keep track of their orders and loyalty points. However, due to ongoing personal issues, you deliver the project late, and when the app goes live there are all sorts of teething problems which mean the business misses out on orders. The client is disappointed with the performance of the app and tries to claim back part of your fee and the money they feel they lost through sales that could not complete. If you don’t have insurance, you could be looking at hefty compensation claims and legal fees (possibly for both sides) – money that most freelancers don’t have. If you have professional indemnity cover for freelancers from Dinghy in place, you’ll be sorted with a team of expert lawyers and money and fees due covered, taking the worry and stress off your shoulders as well as the financial burden.

Public liability insurance

This is really important insurance for software, app or web developer freelancers who work out and about or who deal with the general public. If you ever use co-working spaces, visit clients’ premises or have visitors into your workspace, public liability insurance is a must. It’s an insurance policy that protects you by covering compensation and legal fees if someone is injured or their property damaged in the course of your business.

Claim example: You’re working on a new piece of software and head out to work from a cafe for a change of scene. As you beaver away, lost deep in your code, a passer-by trips over your laptop cable and hurts themself. If their injuries are serious and prevent them from working for a while, they may try and claim against you for the cost of their rehabilitation and lost earnings. These types of claims can run into thousands of pounds – definitely not small change for a freelancer. Luckily for those who have public liability insurance for freelancers from Dinghy, our policy will cover the claim amount up to your policy limit (usually £1million as a minimum).

Business equipment insurance

As a developer, your laptop, computers, hard drives and smartphone are the tools of your trade. Without them, you wouldn’t be able to work, losing you precious income. That’s why we give Dinghy customers the option of business equipment insurance which will insure any gear owned by your business against loss, theft, or damage, anywhere in the world. We’ll provide a replacement or cash straight into your bank account within 24 hours so you can get back to coding straight away.

Claim example: You leave your laptop stored securely in a locker in your favourite co-working spot. Unfortunately, there is a break-in overnight, and the locker has been forced open and your top-of-the-range kit is gone. Disaster! Without insurance, you’d be having to dig into your profits to fork out for a new one. However, if you’re a smart cookie who’s taken out Dinghy’s business equipment cover for freelancers, we’ll arrange for a like-for-like replacement to be with you ASAP, or send you the money so you can buy one yourself.

As well as the reassurance and peace of mind it gives, Dinghy’s freelancer insurance cover is designed with freelance life in mind. It’s low-cost, easy to set up and flexible. You can add the cover you need and can pause your cover at the touch of a button through your dashboard or on our app, ideal if you’re taking a break or experiencing a quiet period. As well as this, all Dinghy policies come with Freelancer Assist, which includes tax, legal and counselling helplines and a dedicated invoice-chasing service to help you get the money in your bank from late-paying clients. A quote takes just 30 seconds on our website – get your freelance developer business insurance sorted now.

About Jack Lewis

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