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Being a freelancer or consultant in the UK offers flexibility, independence, and the chance to build something of your own. But it also comes with responsibility, especially when it comes to protecting yourself and your business against unforeseen risks.
From giving advice that clients rely on, to working onsite or handling sensitive data, insurance isn’t just a nice-to-have, in many cases, it’s a business essential.
If you’re a management consultant, graphic designer, marketing freelancer, contractor, or any other self-employed professional, here’s what you need to know about business insurance, what’s required, what’s smart, and (most importantly) how to find the right cover for you.
Professional Indemnity Insurance (PI)
Who needs it?
Professional Indemnity Insurance (PI) is for anyone who offers a professional service or advice, including consultants, developers, marketers, designers, and business coaches.
What it covers
- Claims of professional negligence
- Breach of contract
- Errors or omissions in your work
- Defamation, libel, or slander
- Legal fees and compensation costs
Real-life example
You’re a freelance UX consultant and a redesign you delivered results in lost revenue for a client. They claim your work was flawed and seek damages. PI insurance steps in to cover legal costs and any settlements, helping protect your livelihood and reputation.
Why it matters
Mistakes happen, and even if you haven’t made one, a client can still make a claim. PI insurance offers peace of mind and may be a contractual requirement, particularly when working with corporates, agencies, or public sector organisations.
Public Liability Insurance (PL)
Who needs it?
Public Liability Insurance (PL) is for anyone who interacts with clients or third parties in person, at home, at a co-working space, or on the client’s site.
What it covers
- Third-party injury
- Property damage
- Legal costs and compensation
Real-life example
You’re a freelance photographer and accidentally damage a client’s expensive equipment during a shoot. Or, a client trips over a cable during a meeting in your workspace and is injured. PL insurance covers these kinds of incidents.
Why it matters
Even the most cautious professionals can face accidental damage or injury claims. While not legally required, it’s often expected, and many clients or venues will require proof of PL cover before agreeing to work with you.
Employers’ Liability Insurance
Who needs it?
You’ll need Employers’ Liability Insurance if you hire anyone, even part-time or on a temporary basis.
What it covers
- Injury or illness claims made by employees
- Legal fees and compensation
Why it matters
This is one of the few legally required forms of business insurance in the UK. Even if you only hire someone short-term, or as a contractor, you may be legally obligated to have this in place, and the fines for not having it can reach £2,500 per day.
Other insurance you might need
Depending on how you work, your location, and what you offer, there are other types of insurance to consider:
Business Equipment Insurance
Protects your laptops, phones, tablets, cameras, and other specialist tools of the trade. Ideal if your gear is portable or expensive.
Cyber Liability Insurance
If you handle client data, store personal info, or work online. This can protect you in the event of a hack, data breach, or cyberattack.
Income Protection or Personal Accident Insurance
As a freelancer, there’s no employer sick pay. If you’re injured or ill and unable to work, this cover can provide a regular income or lump-sum payment.
Legal Expenses Insurance
Covers the cost of resolving disputes (contractual, employment, tax investigations), often an overlooked but valuable policy, especially for those handling multiple client contracts.
How to choose the right cover
Selecting insurance might feel overwhelming at first, but it’s easier when you take a step-by-step approach:
1. Assess your risks
Start by looking at the nature of your work and identifying potential risks:
- Do you give professional advice or services? If a mistake in your work could lead to a financial loss for a client, Professional Indemnity is essential.
- Do you meet clients face-to-face or work at client premises? If so, Public Liability protects you in case of third-party injury or damage.
- Do you rely on expensive tech or equipment to do your job? If your laptop, camera, or specialist tools were lost or stolen, would it halt your business? If yes, look into Business Equipment Insurance.
- Would illness or injury stop your income? As a freelancer or Sole Trader, you won’t get employer sick pay. Consider Income Protection or Personal Accident Cover.
- Do you handle client data or operate online? Cyber threats are real and growing. If a data breach, ransomware attack, or phishing scam could affect your business, Cyber Liability Insurance is worth considering.
Make a list of your exposures and think about what kind of events could impact your finances, reputation, or ability to work.
2. Review client contracts and industry requirements
Before signing on with any client, carefully review the contract for insurance obligations. Some clients, particularly corporates, agencies, and government bodies, will specify:
- The type of insurance you must have (e.g. PI, PL, EL)
- Minimum levels of cover
- Requirements for named parties on your policy
- Proof of insurance before work starts
If you don’t meet these conditions, you might not get paid, or could be liable for costs if something goes wrong. Make it a habit to scan contracts for these clauses and make sure your policies align.
Also, check whether your industry or professional body (like the FCA, RICS, or ICAEW) mandates specific insurance standards for membership or practice.
3. Choose flexible, customisable cover
Not all insurance is created equal. Some providers bundle policies together in fixed packages, which can leave you paying for cover you don’t need, or lacking the cover you do.
Look for providers that offer:
- Standalone policies, so you can pick what’s relevant
- Adjustable limits to suit your level of risk and contract requirements
- Transparent pricing with no hidden fees
- Freelancer-specific or contractor-focused options tailored to your working style
Flexibility is key. The goal is to build a policy portfolio that reflects your business model, not a generic one.
4. Revisit your cover annually (or when things change)
Your business isn't static, and your insurance shouldn't be either.
Reassess your cover:
- Once a year as part of your business admin
- Whenever your income increases significantly
- If you expand your services or niche
- If you take on staff or subcontractors
- When you start working with bigger clients or signing longer contracts
- If you start operating internationally
Underinsuring can leave you exposed, while overinsuring can drain your budget. A quick review helps ensure you’re covered at the right level, without paying for extras you no longer need.
How Qdos is tailored insurance for freelancers & consultants
At Crunch, we’re committed to helping UK freelancers and consultants thrive. That means giving you the tools not just to manage your business, but to protect it.
That’s why we’ve partnered with Qdos, a specialist in small business insurance for contractors and the wider self-employed. Qdos understands the risks you face, and they offer cover that’s designed specifically for freelancers, consultants, and independent professionals.
With Qdos, you can:
- Pick only the policies you need. Nothing bundled unnecessarily
- Access Professional Indemnity, Public Liability, and Employers’ Liability insurance
- Choose from a variety of other tailored policies, including Cyber Liability and Tax Investigation cover
- Get fast quotes and immediate policy documents. Ideal when working to tight deadlines or client requirements
Ready to protect your business?
Having the right insurance isn’t just about risk, it’s about running a resilient, professional business. Take the time to find the right cover for you, and give both yourself and your clients the confidence to move forward.
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