Insurance cover for freelancers: A guide to what you need
- 18 Jul 2018
Self-employment may give you unparalleled career freedom, which is something most of us wouldn’t sacrifice for the world. But the flexibility and control you get from being your own boss has always been offset by one big downside - the financial insecurity that comes with it.
No fixed salary, sick pay or benefits means you lose the comfort blanket of life at a big corporate or SME. And on top of that, being your own boss also makes it harder to access the financial services that can replace those big company benefits – one of which is insurance.
Insurers have traditionally set the hurdles much higher for freelancers, contractors and entrepreneurs, whether that’s forcing you to fit your portfolio career into a pre-defined box, charging exorbitant prices because you’re ‘higher risk’ than ‘normal’ employees, or making you feel like you have to justify your career choice (or get a proper job!).
Thankfully, with more and more people now choosing self-employment over the standard nine to five, a new wave of insurance providers are offering protection that’s built around your needs. So, you can finally enjoy the security of those big company benefits, without losing the freedom you love.
Here’s a quick guide to the should-have policies for self-employed professionals and what to look out for before you buy:
Contents insurance - wherever you are
If you work from home, don’t assume your kit will be covered by your home contents policy, as you’re likely to need specialist business protection. Also watch out if you’re based in a coworking space as, incredibly, these still aren’t covered by many business insurers.
Professional indemnity cover (PI)
If you offer consultancy or advice, chances are you’ll need PI, which will protect you if you make a mistake and the client loses out financially (or claims to) as a result of your work. You may also find that PI is required by clients in their standard contract terms, meaning it’s non-negotiable. To get the best deal, look for a provider that offers a flexible pay monthly policy, so you can cancel or change your cover at any time. So, if you’re having a break from your work, your insurance can too.
Life and critical illness cover
As a freelancer or contractor, you’ve got enough on your plate without any extra worries, which is why life, critical illness and accident cover are valuable investments, particularly if you have a family. Make sure you find a provider who offers advice on what’s right for you to ensure you’re accurately covered and don’t get charged more than you should. Here at Sherpa, our policies are built around the needs of the self-employed, plus you can change or cancel your protection as you need to.
Public liability insurance
Public liability insurance protects you if you cause injury or property damage to a third party, either at your office, when visiting clients, or when you’re out and about on business. It’s essential for certain activities, such as filming or events, but if your work involves lots of contact with the public, it’s a worthwhile investment (and may be required by your industry regulator and clients).
Business car insurance
Most people don’t realise that if they use their car for work, they need specialist business insurance – and it’s a legal requirement. That includes taking the odd trip to and from meetings, or occasional journeys to pick up stock or equipment. As any driver will know, car insurance can get expensive, so to keep costs down, opt for a policy that’s designed for the self-employed and sole traders.
Private medical insurance (PMI)
It might sound like a luxury, but PMI is often considered a necessity by self-employed professionals, as it enables you to get treatment more quickly, avoiding time off and loss of earnings. There are even some schemes out there specifically designed to make PMI more affordable for self-employed professionals.
There’s loads to think about when you’re self-employed and insurance is never going to be top of the list. But getting the right protection sorted sooner, rather than later, will give you valuable peace of mind and security that’s difficult to find elsewhere. And with one less thing to worry about, you can get on with doing what you love.
Meet the author