Professional Indemnity Insurance Definition

Professional Indemnity Insurance Definition

Top 5 Essential Insurance Products For Freelance Consultants

As a freelancer, whether you operate as a sole trader or a limited company, you enjoy the freedom and the rewards of being your own boss. But it does also mean that you don’t have the resources of a large organisation to support you if things go wrong.

And things can – and do – go wrong for freelancers. That’s why you need insurance. Without it, you could end up losing everything you’ve worked for.

Exactly which type of policies you need will depend on the nature of your business but these are the top 5 you should be thinking about:

Professional Indemnity Insurance

An IT consultant fails to foresee a scenario which causes a system he’s designed to crash. A graphic designer inadvertently infringes another company’s trademark when designing a logo. A structural engineer makes a calculation error and a load-bearing wall fails to take its load. Mistakes like these – mistakes anyone can make when under pressure – can lead to claims for damages more than large enough to put you out of business.

Professional indemnity insurance will protect you in the event of such a claim. Subject to policy limits, it will cover your legal bills and the amount of any compensation award.

Public Liability Insurance

Imagine a client trips and injures herself when visiting your offices. Or, when visiting a client’s premises, you trip and damage some equipment. Accidents like these can easily happen. And, in a world of ‘no win, no fee’ TV advertising, can easily lead to you being sued for damages. Public liability insurance will cover you for the cost of any legal fees and compensation payments resulting from just such a third party claim.

Personal Accident & Sickness Insurance

The personal freedom that comes from being a freelancer is a wonderful thing. Until you have an accident or you fall sick and you can’t work. In no time at all, the lack of any money coming in (but still plenty going out) will be adding a level of anxiety that certainly isn’t going to aid your recovery. By providing you with a regular income, personal accident & sickness insurance will free you of that worry.

IR35 insurance

You consider yourself to be a freelancer. Are you quite sure that Her Majesty’s Revenue & Customs do? Or would do if they investigated your circumstances? If you’re working on a long term contract at a client’s premises. particularly if you’re using the client’s equipment and facilities, HMRC might take the view that you’re ‘employed’ and should be subject to IR35 tax rules.

IR35 insurance will cover your costs if you find yourself in need of representation in a tax compliance enquiry. For an appropriate premium, you could also cover yourself against the cost of any unpaid tax, NI contributions and penalties if the enquiry rules against you.

Employers Liability Insurance

If you employ people, you are required by law to have employers’ liability insurance to cover the costs of any claim brought against you by an employee who suffers an injury or illness resulting from your negligence. So this one isn’t an option. And do be aware that the legal definition of an ‘employer’ is drawn quite widely.

Resource:-

http://www.coulsonpritchard.com/