What business insurance do contractors and freelancers need?

Chris Andreou

April 21, 2021

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Getting started with business insurance

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.

How should I approach getting business insurance?

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.

Is business insurance a legal requirement for freelancers?

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.

Contractor & Freelancer Insurance Guide

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Contractor & Freelancer Insurance Guide

6 questions to ask yourself

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.

Contractor & Freelancer Insurance Guide

What's Inside:

  • What is business insurance?
  • What insurance you need
  • Legal requirements for insurance for freelancers
  • Legal requirements for insurance for contractors
  • How to find the best policy
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Contractor & Freelancer Insurance Guide

What's Inside:

  • What is business insurance?
  • What insurance you need
  • Legal requirements for insurance for freelancers
  • Legal requirements for insurance for contractors
  • How to find the best policy

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What is professional indemnity insurance? Guide

What is professional indemnity insurance?

Professional indemnity insurance covers risks in association with your professional services. It protects your business from legal and compensation costs that arise should a client make a claim against you, under circumstances such as:

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Is employers' liability a legal requirement? Guide

Is employers' liability a legal requirement?

Employers' liability insurance is a legal requirement for most UK businesses with at least one employee. The minimum cover level required by the law is £5 million

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What is a retroactive date on professional indemnity insurance?

The retroactive date on your professional indemnity insurance is the date from which you've held uninterrupted professional indemnity insurance, or a date in the past from which your insurer has agreed to cover you.

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Does public liability insurance cover employees? Guide

Does public liability insurance cover employees?

Public liability insurance doesn't cover claims made by employees. It's designed to cover compensation claims made by a third party - for example a client, a customer, a supplier, or another member of the public - because they've been injured or their property's been damaged by your business.

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What is business insurance? Guide

What is business insurance?

Business insurance is designed to protect you from the risks associated with running a business.

As a business owner (whether you're a sole trader, or are running a partnership or a limited company), the onus is on you to think about the risks you face as a business-and to get them covered.

While some risks and their accompanying covers are common to most businesses, others are more niche. The protection you'll need will depend on the risks your business faces.

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What is product liability insurance?

Product liability insurance is designed to cover legal and compensation costs that are incurred when an individual is injured, or if their property is damaged by your product.

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How much does business insurance cost? Guide

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The cost of your business insurance depends on the nature of your work, the type of insurance you need, and your cover levels. Businesses that are perceived as riskier will usually pay a higher policy price.

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What are the difference between public liability and professional indemnity insurance? Guide

What are the difference between public liability and professional indemnity insurance?

Public liability insurance and professional indemnity insurance are both business insurance covers designed to cover compensation claims. However, the types of compensation claims they cover can be quite different.

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What is public liability insurance? Guide

What is public liability insurance?

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What is occupiers' liability insurance? Guide

What is occupiers' liability insurance?

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Can I get business insurance without a trade licence?

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Can I get business insurance before registering my business?

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Your insurer won't ask about your company registration number (CRN) or other business registration details. As such, you'll be able to buy business insurance while you're in the midst of settling the paperwork you need to set up your company.

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Is business insurance a legal requirement?

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Contractor & Freelancer Insurance Guide