Guide To Insurance For UK Freelance Professionals

Professional Indemnity Insurance

Your professional indemnity insurance covers you against legal liability for any losses that your customers suffer as a result your negligent advice. Legally, professional indemnity is required for certain professions such as accounting, law, and financial services. It is also common in other areas, such as publishing, management, computer consultancy, engineering, and design. A professional indemnity insurance policy is required if you give advice that could be considered negligent or if you work in a partnership.

Retroactive coverage should be included in your professional indemnity policy. This will ensure that you are covered for claims that may arise within the next twelve months. It also covers you for work and decisions made prior to the date you started trading. You will need to declare any possibility of a future claim when you submit your proposal form. Underwriters want to prevent them from taking on any known or current claim exposure.

Professional Indemnity Insurance is a ‘claim-made’ policy. This means that if you stop trading, retire, or take up a permanent job, you should purchase runoff coverage for at least 12 month to protect yourself in the event of a claim being made against you.

Employers Liability Insurance

Employers Liability Act 1969 mandates that all employers have at least 5,000,000 GBP of employer liability insurance with an approved insurer to protect them from claims by employees for sickness or accidents caused by work. Most insurers provide coverage of at least 10 million GBP.

This law was amended on 28 February 2005 to allow small businesses that only employ their owner to be exempted. You will likely have a substitution clause in contracts if you work as a contractor or freelance consultant outside of IR35. This clause cannot be fulfilled without employers liability insurance. In practice, however, you should have coverage.

There are no clear rules regarding who is considered your employee when it comes to employers liability insurance. For employers liability insurance, people you may think of as self-employed can be considered your employees. What matters is your relationship with them and how much control you have over their work. Your employees may include casual and part-time staff.

Public Liability Insurance

Public liability insurance protects you from injuries to the public and property damage that results from your business activities. It covers legal fees as well.

Public liability coverage is necessary even if you work remotely. Clients who visit you at your home will be covered by the policy if they cause injury to themselves. This could even be as simple as falling over a cable. Your policy should also cover you if you work away from your home.

Product Liability Insurance

Product liability insurance protects you from injury and damage due to defective goods. This is important if your business involves manufacturing, repair, installation, or retail of goods. A small defect could lead to large-scale claims. Your policy should protect you from safety claims, manufacturing quality, spoilage, and indemnity costs.

Property & Contents Insurance

Your business property will need to be insured, including buildings, fixtures and fittings as well as stock, computers, and equipment. You will need to make sure that your equipment used for business purposes remains covered by your home contents policy. If not, you can purchase business insurance. A growing number of insurance companies are not offering buildings and contents policies that include coverage for stock and equipment in response to the home-working trend.

IR35 and Legal Expenses Insurance

IR35 Insurance covers the costs of professional fees relating tax investigations.

*Income Tax Self Assessment Full Enquiries

*Corporation tax self-assessment full and aspect inquiries

*Employer compliance disputes regarding PAYE, P11D, and NIC

*VAT & IR35 disputes, S660A enquiries.

Income Protection Insurance

In the event of long-term illness, income protection insurance can help employees pay their wages during incapacity. Executive income protection covers both salary and dividends.

Permanent Health Insurance

You don’t have the protection of a permanent employer for sick leave. Private medical insurance is a good option to help cover your expenses if you are ever unable to work. Private care allows for quicker treatment and can save you from lengthy layoffs. In the case of a serious illness, some policies will pay a lump sum. Before you have symptoms that could be considered serious, it is best to apply for medical insurance.

Other types of freelance insurance

* Business interruption (or consequential Loss) insurance covers you for additional costs and trade profits that are lost after a business disruption, such as a fire.

* Tax loss insurance covers the tax, penalty, and interest losses resulting from a HMRC ruling against your, which may result in additional tax being paid, particularly in relation to IR35.

* Legal expenses insurance covers legal expenses such as court costs and solicitors fees. Many policies provide legal guidance through a telephone number.

* Key man insurance can help your company be less susceptible to the death or illness of key employees.

Insurance Tips

* It is possible to purchase employers liability, public coverage and business equipment insurance in one package.

* The premiums for professional indemnity insurance will vary depending on your business type, turnover, and number of employees. Do not underestimate the importance of professional indemnity coverage.

* Pay attention to the fine print of any policy documents. Any clauses you don’t get, ask questions.

* Share all information about your business with your insurance company, including any claims that have been made in the past.