Guide To Insurance For UK Freelance Professionals

Professional indemnity insurance protects you against your legal liability for losses suffered by your customers as a result of your negligent advice. Professional Indemnity is legally required in certain professions, such as law, accountancy & financial services. It is common in other areas such as management and computer consultancy, publishing, engineering and design. If you give any advice which could make you liable, or if you are working in a collaborative arrangement, you should have a suitable professional indemnity policy.

Your professional indemnity policy should include retroactive cover, so that you are insured for any claims arising in the next 12 months, but also for your work or decisions back to the date you commenced trading. When you complete your proposal form, you will need to disclose any likelihood of a future claim, as the underwriters will want to protect themselves from taking on any current or known claim exposure.

Professional Indemnity Insurance works on a 'claim made' basis, and so when you cease trading, retire or take a permanent job, it is wise to purchase run off cover for at least 12 months after that in case a claim is made against you, after your policy has expired for work done previously.

The Employers Liability Act 1969 requires all employers, unless they are exempt, to have at least 5 million GBP of employers liability insurance with an approved insurer to protect them against claims from employees for accidents or sickness caused through work. In practice most insurers offer at least 10 mill GBP cover.

The law was amended with effect from 28 February 2005 to exempt very small companies that employ only their owner. As a freelance consultant or contractor operating outside IR35, however, you are likely to have a substitution clause in your contracts. Without employers liability insurance, you cannot fulfill this clause without breaking the law, so in practice you ought to have cover.

There are no hard and fast rules about who counts as your employee for the purposes of employers liability insurance. People who you many think of as self-employed may be considered as your employees for the purposes of employers liability insurance; what matters is the real relationship with the people who work for you and the degree of control you have over the work they do for you. Even part-time and casual staff may count as your employees.