Depending on your industry and profession, there may be a legal obligation to hold insurance, but many freelancers are not required by law to have any insurance at all and this can instantly seem like an easy place to save money when trying to ensure maximum returns from your freelancing activities. However, freelancer insurance isn’t all just about protecting your client, it also be about protecting yourself!
Insurance is often required to satisfy certain obligations in a contract between you and your client, but rather than seeing this as an unwanted cost, you should consider the benefits that it brings you for yourself.
Consider the risks and exposures that you place yourself under every time you complete work for a client. For example, do you provide professional advice to people that they may act upon and make costly decisions from it? Do you visit your clients at their premises where it is possible you could cause an accident or damage? Is there a chance that you work could somehow damage your clients reputation, business or even cause some kind of physical harm if something went wrong?
It is well worth asking yourself all these questions as if any of these issues were to arise, it is not simply your client’s problem, it will in fact become your problem extremely quickly!
By holding freelancer insurance, you can protect yourself against potential problems that could cost you serious money, or even your entire livelihood. If a client trips or falls as a result of your activities and you do not have the relevant insurance, you could be liable to cover any compensation awarded. This could be a few hundred pounds in the case of a small injury, or it could arise to tens or even hundreds of thousands of pounds if the accident was to be serious.
Another common and highly recommended protection would be professional indemnity, especially if you are in the business of consulting or giving advice. While from the outset it may seem that the worst that could happen from giving bad advice would be to lose a client, the reality is actually a lot worse. Without adequate insurance, you could personally be held responsible for loss of revenue, damage to reputation and branding and even loss of potential future profits. Once again, when you consider the small cost of this insurance compared with the outrageously high potential figures involved in NOT having it, it quickly makes sense that taking out this insurance is actually more about protecting yourself, rather than the client.
Don’t fail to remember as well that by having insurance in the first place, regardless of any issues arising, can benefit you as a freelancer straight away. It shows clients that you are a true professional and gives potential new customers the confidence to try your services without being left high and dry in the event of a problem. In the long run this can help you improve your reputation and standing in the industry and win new business that you may have previously lost out on.