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As a freelancer, you work for yourself. This can bring lots of freedom, but it also means that you are responsible for thinking about a lot of things that employees don’t have to.
Business insurance is important as it can protect you when things don’t go to plan - for example if you’re involved in an accident that means you’re out of work, or a client is unhappy with your work.
Let’s take a look at the different types of insurance that freelancers should consider…
Personal accident/injury insurance
If you are injured and can’t work in the short term, personal accident insurance will usually cover up to 75% of your income. Depending on your policy, you can sometimes choose to receive this on a weekly or monthly basis, or it is usually given as a one-off lump sum.
Personal injury insurance can also be used to cover the cost of bringing in support staff, or to cover costs for when you can’t work at your normal pace as a result of an accident or injury.
Income protection insurance
This is particularly useful for freelancers who cannot work as the result of a serious illness or injury. Income protection insurance policies will usually pay out up to 70% of your income each month.
Professional indemnity insurance
This type of cover protects you against claims made against you by previous clients who suffer a financial loss. It also covers instances where you may be sued by a dissatisfied client – even if they don’t have a valid claim. Though it seems like it would be rare, professional indemnity insurance is important to have because it protects you from potential legal costs and time away from other contracts.
A lot of freelancers work from home but even if you don’t, equipment insurance is a good thing to have. These types of policies usually cover loss or damage to your equipment and/or your premises in the event of theft, accidental damage or other unforeseen circumstances. You can sometimes use your contents insurance to cover this.
Public liability insurance
This is particularly important for freelancers who interact with members of the public, or those who work in public spaces. If a member of the public claims that they were injured or their property was damaged as a result of your work, public liability insurance is there to cover any legal costs of defending yourself and it can also help with any compensation costs.
Business interruption insurance
Business interruption insurance is there to protect you against losses where your business cannot operate as normal, following events like fires or floods. Whilst these are usually included as part of your home or buildings contents insurance, it can be useful to have if stock or equipment is kept on separate premises - like a warehouse or stockroom.
Unfortunately, most business interruption insurance providers have recently stated that these policies do not cover interruption to your business as a result of Coronavirus. Standard business interruption cover does not usually include closure of a business when it is enforced by authorities.
How much does business insurance cost?
Most of these types of policies are usually less expensive than you might think. The price of your cover will usually be based on the annual turnover of your business and the nature of what is that you do. Providers will also take into consideration whether you’re a freelancer working through an agency or directly with clients.
If you’re a freelancer and you need help setting up business insurance, 2020 Accountancy can help you to choose the most cost-effective business insurance for your requirements.
Contact our team today!