Of the many things that new freelancers and contractors have to get their heads around, insurance is often very low on the list. It just seems so fiddly and expensive, doesn’t it? But imagine falling sick for any serious length of time and not having freelance insurance.
Imagine being charged with negligence (it could happen!) or theft of intellectual property and not having any way to deal with the inevitable expense. I hardly bears thinking about.
With all that in mind, we picked up the phone for a good old chinwag with Joey Smith, an expert in freelance insurance who works as part of Kingsbridge Contractor Insurance. Here’s what he had to tell us.
This must be the most commonly asked question, so I’ll get it out of the way first: are there ways to cover a lack of income as part of freelance insurance? As a freelancer with a family, illness is something that worries me considerably.
Absolutely. The Kingsbridge insurance package is made up of five essential products. One of those, and the most claimed upon part of the policy, is Personal Accident Cover (PA). This is what will come into play should illness or injury impact your ability to work.
PA cover will pay you a weekly benefit whilst you recuperate, up to £2,000 a month. In the event that your accident leaves you with a permanent disability, or causes your death, a lump sum will also be paid out.
What other areas can be covered by freelance insurance? I’m assuming travel, car… the usual?
Here at Kingsbridge we do offer a number of ancillary freelance insurance products, from legal expenses cover to cyber liability insurance. You can purchase those as add-ons when you take out your main policy.
We’ve designed our insurance package to be the most compliant and comprehensive contractor cover on the market, and at the best possible price. As well as PA, you’ll also get employers’ liability (EL), directors’ and officers’ Liability (D&O), professional indemnity (PI), and public liability (PL).
As a bare minimum, what should your typical freelancer or contractor be thinking about insuring and how do you go about advising them?
It’s important that contractors and freelancers are covered as they go about their work. Having adequate protection for themselves is essential. It’ll also make sure that their clients and their recruiter (if they have one) are also protected.
We’ve been providing contractors with insurance for over a decade, so we use our knowledge to advise them on what is best. We learn from the claims we receive and the relationships we build, and we pass those lessons onto our customers.
As well as PA, PI and PL are probably the most essential elements of any contractor insurance package. PI will protect you against claims for negligence (such as making a mistake, or giving bad advice). It also provides cover for loss of documents, loss of data, breach of intellectual property, and defamation and libel, as well as acting as a strong IR35 indicator.
PL provides cover for damage to third party property or injury to third party persons, as well as covering any legal fees that may arise as a consequence of any claims that need defending.
The assumption for many freelancers would be that insurance is expensive. Is this the case? How much would a typical plan be, and what might it include?
That’s a common misconception. At Kingsbridge we allow our contractors to pay for their cover on a monthly basis, rather than in one lump sum.
Whilst levels of cover will differ depending on your job role, industry, and the terms of your contract, the majority of purchases come in at around £400. For the money it could save you, should something go wrong in the course of your work, it’s invaluable.
A couple of weeks ago on the blog we discussed pensions and how they can be surprisingly tax effective. Can the same be said for insurance? Can it be put through the business?
To put it simply, yes. Insurance cover for contractors and freelancers counts as a tax deductible business expense, meaning you can put up to 20% of the overall cost through the business.
Are there differences between insurance for sole traders and people operating as ltd companies?
At Kingsbridge, our policy doesn’t change whether you’re a sole trader or operating as a limited company. It’ll provide all the cover you need either way.
Yours is a MAF-endorsed company. What’s the difference in working on freelance or contractor insurance through Kingsbridge rather than anyone else?
At Kingsbridge, our customers mean more to us than just a financial transaction. We look to provide a year-round service, alongside the insurance. We’re always here to offer advice, and we’ll send out useful guides and blog posts throughout the year.
We see it is our role to help educate the contractor marketplace when it comes to freelance insurance, and to change the opinion that it is simply an unnecessary burden.
We also have award-winning customer service, and are so confident that you won’t find a better policy for a better price that we run a price promise scheme. If you do find one better than ours, we’ll match it.
If a MAF client wanted to chat further about this, how would they get in touch with you?
It’s easy to get in touch with Kingsbridge. You can speak to a member of our expert customer service team on 01242 808740, or drop us an email at [email protected]. If you’d rather get in touch with me directly, you can email me at [email protected].
Main image credit: Brad Neathery, Unsplash.