Unlike employees, freelancers alone bear responsibility for their work… and for any mistakes! That's where professional insurance for freelancers proves particularly useful. It covers you in various situations (often unpleasant, let's be honest), while also serving to reassure your clients.
Through this article, Codeur.com helps you better understand the protections offered by professional insurance for freelancers, the situations that can make it indispensable, and the criteria to consider before taking out a policy.
Happy reading!
What is professional insurance for freelancers?
Theprofessional liability insurance acts like a lifeline in case of unforeseen events, errors, incidents or accidents. Whether you are an IT consultant, doctor, web writer or builder, such coverage is essential.
It covers financial damages and losses related to:
- To your equipment or a client's
- To a significant data loss
- To the malfunction of one of your products or services
- To a physical accident
Conversely, professional insurance for freelancers does not cover:
- Contract breaches, reductions, or cancellations
- Consequences related to false advertising or unfair competition
- Deliberate and foreseeable delays in the delivery of a service
There are online insurance offers specifically for freelancers, such as Assurup
Assurup is a expert online insurance protecting freelancers. Codeur.com chose it as partner because of its attractive offer particularly suited to independent web professionals.
Get a a few clicks personalized quote for your professional liability insurance and subscribe in 3 minutes to download your insurance certificate.
Is freelance professional insurance mandatory?
The answer is simple: no. It is not not mandatory to take out professional liability insurance, but it is highly recommended.
You know the famous saying "it only happens to others," right? It applies to your freelance work. Even if you think you carry out an activity free of any risk, There is no such thing as zero risk.. We will also see examples where such protection proves invaluable in the next part of this article.
There are several mandatory insurances when you run a business, such as those covering your assets (for your car, premises, or equipment). Some liberal professions must absolutely take out professional liability insurance.
This is the case for professions in the medical field, for example. For these specific activities, there are specialized protection organizations that understand the risks of medical roles. Generally, these insurers also offer legal assistance.
In which cases is professional insurance useful?
It's impossible to list every situation where professional insurance for freelancers can save you! However, here are some concrete examples where this protection is welcome:
During a consulting assignment
An independent consultant, regardless of the field, is required to give advice and a roadmap to their client.
If the client applies the consultant's strategy and it doesn't work as expected, they may turn against the freelancer claiming that their part of the contract wasn't fulfilled or, worse, that the freelancer harmed their business.
During an "on-site" assignment
A freelancer in the construction sector may need to hire labor to help on a site. Imagine one of the workers gets injured… Professional insurance will cover medical expenses and any temporary total disability (TTD).
Similarly, if during the project the freelancer or one of their subcontractors causes damage, this protection will make it possible to compensate the client.
If an accident is caused by the freelancer
You are a freelance photographer or videographer… During an event, a guest trips over the cables of your electronic equipment and is hurt. You will be responsible, but it will be your professional insurance that will cover the medical expenses.
You can also take the example of a client who is injured during a training session given by a fitness coach or a yoga instructor. Once again, it is your protection that will cover the compensation, medical and/or legal costs.
In case of an unintentional mistake by the freelancer
No one is perfect and we all make mistakes. Even experienced freelancers! It's human.
One example is a webmaster who forgot to fix all the security vulnerabilities of a website before delivering it to the client. If the latter suffers a cyberattack, they can hold the freelancer responsible.
Why subscribe to freelance professional insurance?
Beyond the protection provided by professional coverage covers you in case of a dispute, damage, or injury, subscribing to such a policy proves useful for:
Reassure clients
Some companies now require that you have professional insurance properly in order before signing with you. It's a way for them to protect themselves if you make a mistake or cause harm.
Benefit from legal advice
Some insurers offer a legal assistance or protection. This allows you to have your service contracts reviewed or approved by legal specialists before signing.
Make borrowing easier
If you need to invest in equipment or premises for your business, your bank may ask you for a proof of professional insurance.
Avoid unpaid invoices
Thanks to the legal protection included in some policies, you benefit from valuable advice and resources to recover your payments.
Prevent cyber risks
No matter your activity, you inevitably work with computer tools, which exposes you to malicious attacks. You may lose data or have to call a professional to recover all your resources. Professional coverage can protect you from damages related to such attacks.
How to choose professional insurance as a freelance?
You want to take out professional insurance for freelancers, but you don't know how to choose? It's true that the offering is quite large and that each provider has several levels of coverage.
To help you choose the one that will suit your activity and needs, here are 5 criteria to consider:
1. Your specific risks
One of the first things to do is examine the specific risks inherent to your activity. Will you need to cover material, human, cyber, administrative, legal risks…?
Obviously, this will depend on your profession and theplaces where you work. If you mainly stay at home and don’t hire contractors/employees, you will have fewer risks to cover than a freelancer who often visits clients and uses heavy equipment.
2. Client volume and type
Another thing to consider: the profile and number of your clients. The more clients you have, the more risk you take.
Moreover, if you work with large groups, construction companies or organizations that operate in sensitive areas (such as medical or security), you will need enhanced protection.
Indeed, this type of clientele often has strict contractual obligations. Not to mention they may provide you with costly equipment and resources. In the event of a problem or claim, the cost can be high for your small business. It's better to be well protected.
3. The level of coverage
After a detailed analysis of your needs, make sure the freelance professional insurance you choose offers different levels of coverage. The goal is to find the plan with the best protection/price ratio.
There is no need to subscribe to a plan that includes high material guarantees if you only work with your PC in your living room. And vice versa! Prefer to boost protection if you regularly travel to worksites.
4. Exclusions
As with any contract, you must read the fine print… What are the exclusion criteria ? It would be a shame to discover that your assignments and the risks specific to your activity are not covered by your professional insurance…
So be sure to find out the conditions required to receive compensation, as well as the situations in which you will not be reimbursed.
5. The insurer's experience
Another factor to consider when choosing your professional liability insurance is the insurer's experience. Ask yourself these questions:
- How long has it been on the market?
- Does it cover other freelancers or businesses in your industry?
- What is its reputation regarding compensation?
- Is it specialized in specific professions, particularly yours?
The more experienced and specialized the insurer, the better they will be able to help you choose a plan suited to your needs.
How much does freelance professional insurance cost?
The price of your professional coverage will of course depend on the level of protection you want, but also on the risks associated with your activity. Some insurers also take into account the size of the company and the declared turnover when calculating your premium.
When you carry out a very low-risk activity, with few trips and clients who are not sensitive, expect around €20 per month. But if you need enhanced protection, plans can go up to €50/month.
Feel free to get online quotes and to use comparison tools to choose the best value-for-money plan.
Conclusion
As you can see, freelance professional insurance rates are quite advantageous. the benefit/price ratio is largely in your favor. It would therefore be a shame to miss out on good protection for economic reasons!
