TPC Team
This article was written by our partners at Kingsbridge, a leading insurance specialist with over two decades of experience. Trusted by over 33,000 contractors, they offer dedicated support & guidance alongside comprehensive, market-leading insurance packages.
Whether you’re behind a camera, a screen or a sketchpad, you’re a portfolio professional not an insurance expert – and you shouldn’t have to be! With lots of confusing (and wordy) information out there about business insurance for freelancers, sole traders and the self-employed, we wouldn’t blame you for getting a headache just from thinking about insurance.
But independent professionals thrive when they’re properly supported. So, to help you out, we’ve done the leg work and broken all the nitty gritty insurance details down into 3 clear categories – why you need insurance, what each type coversandhow to choose the right policy.
Why portfolio professionals should consider insurance
Everyone running a business could benefit from being insured, and that includes the self-employed. Why? It can protect you from the risks you face day-to-day and offer many benefits for you and your livelihood.
Freelancer risks
Risks will of course vary depending on profession, but the most common ones are:
- A client or member of the public trips over your equipment and is injured
- You visit client premises and cause accidental damage to their property
- You provide professional advice or make an error resulting in financial loss for a client
- A third-party uses your work in breach of copyright and you need to take legal action
- You’re a victim of a phishing email or scam, exposing your clients’ data to cyber criminals
- You have a fall at a client’s office, leaving you injured and unable to work
Insurance benefits
Some benefits of insurance might seem obvious but it’s easy to forget what it can offer. When you’re insured, you have things like:
Financial protection
Legal cases, an inability to work or business disruption can hit you hard. Insurance can help cover costs, taking some of the burden off your shoulders.
Peace of mind
You’ll have one less thing to worry about (and maybe sleep better) knowing if something was to happen, your insurance has you covered.
Supported recovery
Getting support with claims and associated costs can help you manage incidents quicker, so you can get back to what you do best.
Client trust
When trying to secure clients, having insurance can make you look professional. Certain cover types can also be a requirement for some contracts!
Types of insurance
Different providers will offer varying types of cover. Many offer combined policies including multiple covers in one package, with optional add-ons to tailor your policy to your profession.
So, what are the main policy types you’ll find out there for freelancers?
Public liability
What is it?
Also referred to as PL, it insures against claims resulting from third-party injury or damage to third-party property – the key phrase being ‘third-party,’ i.e. someone, or something owned by someone, outside of your business.
What can it cover?
Bodily injury or property damage to a third party (excludes employees)
Compensation payments
Repair costs
Professional fees (including. legal)
Medical fees
Examples of when you might claim
You accidentally knock a coffee over a client’s computer, a client trips over your laptop cable or something you’ve built/fitted causes injury to a third-party.
Professional indemnity
What is it?
Sometimes abbreviated to PI, it protects against claims of financial loss caused by your professional negligence while providing advice, consultancy or other services.
What can it cover?
Bodily injury or property damage to a third party (excludes employees)
Compensation payments
Repair costs
Professional fees (including. legal)
Medical fees
Examples of when you might claim
You provide creative output that is deemed off-brief and has to be redone, or you incorrectly advise a client on a project, resulting in delays in completion and financial losses.
Personal accident cover
What is it?
Sometimes referred to as ‘occupational personal accident’ cover, it pays a weekly benefit if you can’t earn a living due to an injury sustained while working or travelling to and from work.
It can also pay a lump sum if you’re left permanently unable to work or an incident is fatal.
What can it cover?
Accidents and injuries that happen while:
Travelling to or from work
Working at a client’s premises
Working from your home, your office or workplace
Examples of when you might claim
You have a fall while visiting a client and break your leg, or you’re in a car accident (found not your fault) and injuries leave you unable to work for months.
Cyber liability
What is it?
Cyber liability (or cyber insurance) covers costs resulting from cybercrime like loss of data, ransomware costs, breach of copyright including financial loss and legal fees.
What can it cover?
Business interruption costs
System and data rectification costs
Regulatory defence and penalties
Cyber extortion and ransom costs
Examples of when you might claim
You click on a phishing email and give access to your clients’ personal data, a hacker encrypts your data and demands a ransom or a client sues you for mishandling their data.
Employers’ liability
What is it?
One of the only covers that’s a legal requirement, this covers legal and compensation costs for claims from employees who are injured or get ill due to their work.
It’s a mandatory requirement if you employ anyone. There are some employers/company types that are exempt – you can find more information on page 3 of HES’s guide for employers.
What can it cover?
Employee injury or illness due to their work or your workplace
Legal expenses to defend the claim
Medical expenses you’re liable for
Examples of when you might claim
An apprentice trips while visiting your premises, an employee gets ill from working with toxic materials or an assistant is electrocuted after using faulty work equipment.
Legal expenses
What is it?
Legal expenses cover can protect you/your business if you need to instigate a case or need to defend against a claim brought against you.
It can also provide cover if you’re called up for jury duty!
What can it cover?
IR35 investigations
Legal expenses HMRC inquiries (tax, national insurance etc.)
Contract disputes
Loss of earnings due to jury duty
Costs resulting from identity theft
Legal fees to recover losses from personal injury (caused by a third party)
Debt recovery (unpaid goods or services)
Examples of when you might claim
You need to pursue a client for breach of contract, need representation for a HMRC investigation or need to cover your income because you’re called for jury duty.
Choosing the right insurance cover
Now you’ve had a whistle stop tour of insurance types, how do you go about deciding what policy to go for? Good question – here are a few tips:
Risks
List out any risks you might be exposed to in your line of work. This will help you understand what types of cover you might benefit from. Plus, lists always help!
Limits
The limit is the maximum amount of financial cover your insurer is liable for, i.e. if your public liability limit is £1m, that’s the maximum amount you can claim for.
Conditions and exclusions
It’s crucial to check policy wording for this. These will determine what circumstances can exclude a claim from cover and what conditions you need to meet for a claim to be deemed legitimate.
Extra cover
Most freelancer policies will combine covers like public liability and professional indemnity. But check for optional covers to add on to get the cover you need.
Where to start
So, we’ve laid out all the info but where do you start?
Research
Look for freelancer-friendly insurance providers or brokers and keep an eye out for ‘contractor insurance’ as some will use this name for their policies.
Ask questions and don’t rush
Choosing the right insurance could be a life saver if the worst happens. Take your time and find a provider that will happily answer any questions you have so you can make sure your policy is the best fit for you.
Check the ‘fine print’
When looking at policies, always check the terms and conditions, especially exclusions. This will help you understand your cover and make sure your insurance covers your professional circumstances.
As an example, Kingsbridge offer a combined Contractor Insurance policy, including covers like Professional Indemnity, Public Liability, Personal Accident and Employers’ Liability in one place. Plus, they offer Legal Expenses cover and Cyber Liability as optional add-ons should you need them.
And we’re an official partner of The Portfolio Collective (you even get a handy 20% discount from us when you sign up as a Pioneer member)! Trusted by over 33,000 contractors, our in-house support team are on hand to answer questions and help find the right cover for you.
Get in touch today for a quick online quote or if you have any questions – even if it’s just to figure out how to active your TPC discount.
Think this sounds like the right path for you? Come along to our monthly Community Welcome Call for new members to find out what a portfolio career could look like and how The Portfolio Collective can help you take those first steps towards professional success – and don’t forget to connect with our community!
