What business insurance do contractors and freelancers need?

As a self-employed person-whether you're running a full-time freelance gig, or hustling on the side-you'll need to think about the risks you face and whether business insurance could be a good idea.

In this article, our business insurance partner, Superscript, explains the covers you may want to consider getting.

Whatever your freelance work consists of, there are different cover options available to match your unique set of risks.

A home-based freelancer, for example, may not see a need for public liability cover, which is designed to protect you against injury or damage caused to the public by your work. On the other hand, a freelance photographer, working with equipment, hazardous cables and lots of people, most likely will.

And a candle-making crafter may see no need for professional liability cover, which is designed to protect against financial damage caused by professional advice - but will probably want to opt for product liability insurance. 

While many insurance providers will offer different products under their individual names, for example, ‘public liability insurance’ or ‘professional indemnity insurance’, others will group basic covers under the umbrella term ‘business insurance’. 

Superscript does things a little differently, as we enable you to select from a range of covers to create a policy that meets your individual needs - and on a monthly subscription basis, which means that you can adjust and cancel covers as and when you need to.

This tends to be useful for those in project based work. For example, you may require public liability insurance for a few weeks, to cover an event, but you don’t necessarily want to pay for a whole year’s worth of cover.

Business insurance isn’t a legal requirement in the UK, unless you hire employees - in which case, employers liability insurance is mandatory.

All other business covers are optional. However, you may find that some clients require you to have certain covers (professional indemnity insurance or public liability insurance are quite commonly required, for example).

In absence of this, it’s a good idea to weigh up the cost of getting cover against the risk of not having it in place, in order to decide whether a specific cover is right for you.

A simple way to start thinking about the cover you may need, is to ask yourself six questions:

1. Does my work involve in-person contact with people? 

If your work involves contact - even if indirect - with other people, you may like to think about public liability insurance, which is designed to protect you financially if you’re faced with a compensation claim as a result of someone being injured or their property damaged due to your work.

It covers you while working at your own premises and when working at a client site, or in public and is one of the most common covers for freelancers.

2. Does my work involve the selling or gifting of products?

If your work involves the selling or even gifting of products, you’ll want to consider product liability insurance (which, with Superscript, is automatically included with your public liability insurance).

It’s a common misconception that the manufacturer is liable for any product-related issues, but this isn’t always the case. If the manufacturer is based outside the EU, for example, it would not be liable - but you may well be!‍

3. Does my work depend on expensive tools or equipment? ‍

This is a very personal choice, but business contents insurance may be worth thinking about if your work is very much dependent on specific tools or equipment that you would have trouble replacing in the absence of insurance.

A freelance writer, dependent purely on a basic laptop, may not feel the need to get this cover, while a photographer, with expensive camera equipment, may find it necessary.

4. Does my work involve giving advice?

If your work involves any form of consultancy, advice, design or even healthcare-related services you may want to consider the benefits of professional indemnity insurance.

This particular cover is relevant to many freelancers, and includes defence costs related to a claim and compensation if your client suffers a financial loss as a result of your professional services.

5. Does my work involve working with personal information, or computers?

If your work involves any storing or processing of personal information, you may want to think about cyber insurance.

It sounds deceptively techy, but is actually relevant to any business (tech-focused or otherwise). Very few of us get by today without some form of technology at work, whether it’s in the form of websites, servers or basic online software.

Even for those with only a small IT footprint, cyber-attacks present a risk. Cyber insurance offers assistance in the instance of a data breach, hacking, cybercrime and the business interruptions these events may cause. 

6. Does my work involve use of media (e.g. photography)? 

If your work involves handling media content - for example photos on a website or social media, the accidental use of a trademarked image could lead to trouble down the line.

‍Media liability insurance, is designed to protect you in these situations. They actually happen surprisingly often - and can be a costly mistake to make. With Superscript, media liability cover is automatically included with the selection of professional indemnity insurance.