One of the downsides of being a freelancer is that you don’t get to enjoy some of the benefits a regular employee has. Things like sick days or the ability to book a day off work. If things go wrong for a 9-to-5 employee it’ll probably mean an unhappy boss – for a freelancer it could mean your entire business. Thankfully professional insurance exists to mitigate the impact of such disasters. Many insurance products have been created specifically for the self-employed, so whatever your business you’ll have options for appropriate cover.
Here are some of the most common insurances you may need.
This is a fairly straightforward one. You can get a plan with an insurance company that means when you fall ill you can still ensure that you have some income. Falling ill, especially seriously, can be devastating for a freelancer with no or little savings and even more so with late payments so rife. Sickness cover offers a lifeline for when things lurch towards the terrible.
Professional Indemnity Insurance
If you work for a company, complaints will usually go to them and then filtered to you through your superiors. It’s unlikely you’ll lose any wages for an error, and especially for one that isn’t completely proven. As a freelancer, your client is coming straight after you for errors, omissions or negligence, imagined or otherwise. If you’re going to fight your case it’s going to cost you. Professional Indemnity insurance will ensure you won’t be out of pocket to do so.
Jury Service and Legal Protection
There is a long list of things that you may need to do that will involve some pretty hefty legal fees. This isn’t really something a lot of people can afford, especially so when you’re chasing debt as you haven’t got paid in the first place. This can sometimes lead to freelancers just giving up rather than taking something to the end. Some insurance products will mean you can get funds to help you fight debt recovery cases, personal injury claims and other things. You can also get a payout if you’re called up for jury duty to cover your lost income.
IR35 Contract Assessment
If IR35 has left you, like so many others, confused, alone and in the dark then this insurance might be prudent to get. It’s a pretty complicated issue to deal with, and one where it’s easy to get caught out. With this product you can get the costs of a contract assessment to see if it is IR35 compliance and save you a headache down the line.
Freelancer Tax Protection
IR35 enquiries often start with a PAYE compliance visit or enquiry from a tax return. This can lead to a Commissioners Hearing. That means costs in regards to representation. By having this protection you can make sure that is all covered, so that you can fight your corner properly. Some products will even organise a tax specialist to handle your case for you.
Tax Liability Cover
Of course, if it turns out you have been caught out by IR35 legislation, you’re going to be in for a whole new set of costs. Penalties, National Insurance contributions, tax and interest could all suddenly be billed to you. Again, as a freelancer, unexpected expenditures can do a lot of damage. With Tax Liability cover you can get these costs covered instead of having to shell out yourself.
Photo by Nic McPhee