Freelance Insurance Myths Exposed

Posted on 4th July 2017 by Katherine Ducie

You’ve just established your own business, it’s exciting and you can’t wait to bring on your first client. But, before rushing off there is just one more thing to consider, your freelance insurance.

Providing insurance to the Freelance sector for over 25 years one thing we have noticed is that many newbie freelancers can be trading for months before realising they need insurance. Reasons being they avoid it because they think it’s too expensive or presume they don’t actually need it.

Insurance is an essential part of your business, whether you are a start-up, SME or freelancer. It’s a very important requirement if you want your business to succeed. We’re here to tackle those Freelance Insurance Myths and provide you with the information you need to ensure the safety and future of your company.

Insurance myth 1: “Insurance is so expensive”

Caunce O’Hara’s Professional Indemnity insurance premiums start from as little as £98.00 a year. A small price to pay to keep your business safe and thriving wouldn’t you say?

But don’t forget, the higher your turnover and level of cover, the more exposure you place on insurers and as such the premiums do increase. Don’t let this worry you, we can offer specialist schemes rates allowing our prices to compete in the market.

Our rates have remained competitive for most professions despite rising Insurance Premium Tax.

Get here for a quick online freelance insurance quote today

Insurance myth 2: “I’ve only just started my business, I don’t need insurance yet”

As soon as you start trading you need to carry insurance even if you don’t yet have a contract. If you have employees then you have a legal obligation to immediately protect them under an Employers Liability policy. It is always beneficial to get a policy in place then tender for contracts. Most people will ask you to evidence you have insurance before considering you for the role.

Insurance myth 3: “Insurance doesn’t apply to me, I’m just a one-man band. It’s only for bigger companies”

You do not have to be a massive company to make a mistake and have a client pursue you for your errors. Any business, irrelevant of the size, requires insurance, even more so as a Freelancer as your business is your life. If you make a mistake and don’t have insurance the claims made still need to be paid, without insurance this comes out of your own pocket! With our own in-house claims team, we have supported freelancers claims for many years, some claims can cost thousands of pounds. Without insurance in place, claims made could result in bankruptcy and the closure of your company.

Insurance myth 4: “I don’t have a written contract, just a verbal one, so I don’t need insurance”

Even if a contract has not been signed you have still entered into a verbal agreement and that is still a binding agreement. Insurers will defend you in this case but you do need insurance. We highly advise that you do have a written contract drawn up also as it will make the boundaries clear of what is expected from both parties and protect you in the event of a claim. A written contract will not only allow you to establish your terms and conditions of business but also payment expectations, giving you reasonable protection when settling invoices and missed payments.

Insurance myth 5: “Applying for cover is really time consuming and I have to fill out a lengthy proposal form”

Years ago, you would be correct, this is a very common worry with anyone looking for insurance. In the past there was a lot of paperwork to complete but with the age of the internet our application can be completed online within minutes. The questions are very easy to answer and follow a yes, no structure. Now, quotes are provided instantly, cover is bound in minutes and your documents sent over within moments of agreement. So long paperwork!

Insurance myth 6: “Insurers and brokers just want my money and will not help or pay out in the event of a claim”

This is one of the most common myths and concerns surrounding any insurance. Manipulations in the press and hearsay have exaggerated this worry among the public. We can confirm your insurer is there to help you and we are on your side. At Caunce O’Hara we have our own in-house claims department and they have delegated authority to settle certain claims without referral to Insurers. Professional Indemnity claims are becoming more and more common and our in-house claims team take the hassle out of the process by dealing with the insurers for you. One of the most common claims we receive is for damaged equipment, claims like this can be settled in house and in most cases damaged items can be fixed or replaced within 2-3 days.

If you have any more questions or concerns about your insurance as a freelancer, just let us know by calling 0333 321 1403