A guide to insurance for freelancers

Most businesses will face some level of risk, and insuring against these risks may be a good idea. The level of risk and subsequently the amount you might pay to insure against these can vary widely depending on the type of work you do.

There are three main things to consider when deciding whether to take out business insurance:

• Could you afford the cost of a claim? The cost of any claim will likely far outweigh the cost of purchasing your insurance.
  
  
• Do you have a legal obligation? Whilst less common for freelancers if you have staff, even if they are part time or temporary, insurance is a legal requirement. You could be fined if you don't have it in place, with the certificate to prove it.
  
  
• Will insurance open more job opportunities? Some clients will require adequate insurance to enter into a relationship with you as a freelancer.
  

Knowing what insurance you need can be confusing. As a freelancer, depending on your work, you may be more likely to take steps to cover against accusations of copyright infringement, for example, or public liability should a member of the public have an accident as a result of the presence of your equipment.

Below, we've listed some of the most common risks that freelancers are likely to face and how to take steps to protect against them.

If you use third party materials such as images and music without having the appropriate permissions to do so, you could be liable for intellectual property infringement. Let's say, for example, you produced a piece of marketing collateral for a client using a photo that was sourced through google images. The ownership was overlooked and no one obtained the appropriate permissions to use the photo. Your client could be sued and, more often than not, this would result in your client taking legal action against you.

What if a client refuses to pay your fees due to a complaint about your service, dissatisfaction with your work or simply to avoid their contractual agreement by claiming negligence? Whether you did anything wrong or not, this leaves you in a difficult situation, in need of legal support and potentially out of pocket as a result.

Working to deadlines can be stressful. Spelling mistakes, inaccurate pricing, typography/layout errors, or omission of vital information are little things that could cause massive damage to your reputation.

Now for the good news - for every risk listed above (and many not listed), there's cover to help reduce the impact of that risk.

It's your job to come up with big, new and sometimes controversial ideas. But what if they don't work out and your client doesn't get the results they expected? Worst case scenario, you could face a legal claim and compensation, which is where Professional Indemnity (PI), also known as errors and omissions insurance, comes in. Designed for any business offering a professional service or advice, professional indemnity insurance will protect you if:

• You make a mistake, or a client suffers – or claims to suffer – a financial loss as a result of your work. If this happens, professional indemnity insurance will cover your legal expenses and compensation costs.
  
  
• You infringe industry regulations. For example, if your work includes television commercials, the contractual obligations of the commercial producer are defined by the APA/IPA Production insurance briefing schedule (PIBS) - failure to meet these obligations could result in significant costs and penalties. In situations like this, professional indemnity will cover your defence costs and resulting fines, many of which are insurable.
  
  
• You become involved in an intellectual property dispute - whether protecting your own intellectual property, or defending an infringement of somebody else's. That could be using images or music without permission, or infringing on another company's branding or logo.

You may also find that clients insist you have professional indemnity cover – so having it could even help you win business.

Similarly to professional indemnity insurance, Media liability insurance is designed for the unique needs of media and advertising businesses, protecting you from infringement of intellectual property, breach of confidentiality or right to privacy, breach of comparative advertising regulations, slander or making false or misleading claims. So, if you're faced with a #fail on social media, a client's website, or another online or offline channel, any legal claims and compensation may be taken care of by this particular cover.

Public liability insurance is another basic requirement, protecting your business if you cause injury or property damage to a third party. For a freelancer, you could be at risk while visiting a client's office or attending industry events. Even if you're mainly home-based, public liability insurance may be relevant to you as you may find yourself working elsewhere from time-to-time, or working with clients at your home office.

Your valuable equipment also needs protecting, whether that's a simple laptop, camera, or filming equipment. Business contents insurance covers everything in your office, including computers, furniture and documents. You should also consider portable equipment insurance, which covers everything you take out and about with you, such as laptops, mobiles, cameras and tablets.

This article was written in association with our business insurance partner Superscript. Superscript provides flexible cover by monthly subscription, tailored to the needs of freelancers. Freelance Business users receive their first month's cover for free with Superscript and can get covered online in under 10 minutes. Simply go here!