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What freelancers need to know about professional indemnity insurance


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Freelancers and the self-employed are a significant and growing portion of the UK workforce – with their numbers increasing from 3.2 million in the year 2000 to more than 5 million in 2019. With COVID-19 continuing to play havoc with the employment prospects of millions, these numbers are set to grow even further.


There are a few important practicalities that self-employed freelancers need to become accustomed to, however. One of the most important of these is professional indemnity insurance – something that those employed by a company would never have to consider.


Whether you’ve recently become a freelancer, are considering embarking on the freelance journey, or simply need a refresher, let’s go through what freelancers need to know about professional indemnity insurance.


What is it?

Professional indemnity insurance will cover you for claims of damage made against you in the course of your professional duties. If a client claims that your work has resulted in some form of loss or damage to them – in the form of inadequate, inaccurate, or negligent advice, for example – then professional indemnity insurance will cover you against the cost of the claim as well as any necessary legal fees.


Specific coverage will vary from insurer to insurer, but the principal areas covered by professional indemnity insurance (listed in an in-depth guide from Direct Line) include:

  • Confidentiality breaches
  • Irresponsible employees
  • Professional negligence
  • Defamation
  • Infringement of intellectual property rights
  • Loss of, or damage to, documents
  • Legal costs


Which freelance professions need it?

The simple answer is that all freelance professions should consider looking into professional indemnity insurance, no matter their area of work. Individual circumstances may differ, of course, but it is always worth thinking about the possible ways a claim against you could be made – it may be more necessary to have insurance than you might think.


Why do you need it?

Although it’s not a legal requirement for freelancers to have professional indemnity insurance, many professional associations only accept freelance members with insurance already in place. Aside from this consideration, of course, professional indemnity provides valuable peace of mind. It may seem like an extra expense you could do without, but it’s a lot cheaper than dealing with any potential claim that could be made against you if the worst should happen.


How much does it cost?

The cost professional indemnity insurance will vary depending on the nature of your work and the size of your operation, but it can be relatively inexpensive – starting from only a few pounds each month. As with other kinds of insurance, it’s always best to compare different quotes from insurers to find the best deal for you. It’s always a good idea to read the small print too, of course – although it’s great to get a cheap deal, you want to make sure that your insurance covers you for everything you need it to.

Life as a freelancer can be incredibly freeing and fulfilling, but it can also be quite daunting. With important practicalities such as professional indemnity insurance taken care of, however, you’ll be able to work with more confidence.


Guest Post by Jessica Pierce

Jessica has been a contributing writer for different publications for two years now.  Her articles are mainly focused on finance and start up companies. She, together with a few colleagues has started a small, independent research company which is set to launch this year.

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