Professional liability insurance for freelancers
What is Professional Liability Insurance?
This negligence and mistakes can drag viable allegations from the clients that can affect their reputation. Here, professional liability insurance can help you. It is considered to be an indemnity cover that protects professionals against claims made by their clients accusing them of malpractice, negligence, and misinterpretations. Lawyers, doctors, engineers, and others with expertise can benefit from this insurance.
Apart from full-time professionals, this insurance is highly regarded for freelancers as well. As freelancers operate independently, they are personally responsible for any type of legal claims made by their clients. Professional liability insurance for freelancers can handle their legal defense charges, damages created through alleged mistakes, settlement costs, missed deadlines, etc. If you are a freelancer from industries like design, consulting, IT, writing, and marketing, this significant coverage can benefit you vastly.
Why Do Freelancers Need Professional Liability Insurance?
Being a freelancer, you might be familiar with the fact that this profession doesn’t follow traditional employment strategies. Freelancers majorly operate individually without any financial or legal safety. So, they are personally responsible for any kind of disputes or mistakes they commit. Your clients may claim against your services.
In this circumstance, professional indemnity insurance for freelancers can be your optimum solution. This insurance offers essential protection by covering your legal charges, settlement costs, and claims related to your contract breaches and errors. Freelancers must acquire this insurance because of the reasons we mentioned below:
It handles errors and omissions like missed deadlines, mistakes, and overlooked details that can lead to expensive legal claims.
The insurance can cover client disputes like dissatisfaction and financial loss due to your negligent service.
There are many clients who require freelancers to offer their insurance before finalizing their agreements.
Types of Coverage for Freelancers
Professional Liability Insurance
This insurance type protects freelancers from legal charges and delivers financial security against claims like errors, omissions, and negligence. The following plan also covers legal defense charges, settlements, and judgments that result from the claims made by your clients or any third party.
Health Insurance
Health insurance is one of the great types of freelancer professional indemnity insurance. It offers coverage against your medical bills. Some of its reliable inclusions are doctor visits, prescription medications, hospital stays, and surgeries along with preventive care.
General Liability Insurance
This kind of insurance mainly offers protection against third-party claims of property damage and bodily injuries. This liability insurance also covers legal defense expenses, medical costs, and potential settlements.
Cyber Liability Insurance
It is a specialized and highly recommended insurance plan to protect you as a freelancer from the financial consequences of cyber threats, data breaches, and other cyber-related issues. It delivers financial expenses due to the compromise of clients’ sensitive information.
Business Insurance
Business insurance protects you from valuable risks and financial inconveniences related to your work. One of the highly adopted business insurance types is BOP, which is a comprehensive coverage package for small businesses.
What is covered in Professional Liability Insurance for Freelancers?
- Breach of contract: The insurance protects you against claims of failing to offer promised work, inconvenience in meeting deadlines, and violating contractual terms.
- Claims for negligence in work: It safeguards you from allegations of unintentional omissions, mistakes, and professional errors committed by you in your service.
- Legal defense charges: Freelance professional insurance covers attorney charges, settlements, and court expenses even if the claims have been made in a baseless manner.
- Copyright infringement: This is mainly viable for writers or professionals from creative fields. It protects against claims due to the usage of copyrighted materials.
- Financial losses of clients: It pays for the damages if any client goes through financial losses due to your services.
- Defamation claims: The insurance covers claims raised due to libel, slander, or any kind of misleading statement that you have used unintentionally in your work.
What is not covered in Professional Liability Insurance for Freelancers?
- Intentional fraud: if the claims are against your intentional dishonesty and illegal activities, the insurance will not cover these fraudulent aspects.
- Data breaches and cyberattacks: This insurance can’t cover cyberattacks or any kind of data breaches. To acquire this, you need to get separate cyber liability insurance.
- Employee-related claims: It doesn’t cover any type of employee’s compensation, harassment claims and discrimination.
- Business property damage: The insurance doesn’t cover personal property damages of the business-like equipment. You need to adhere to separate business property insurance to enable this service.
- Trademark violations and wrong advertisements: Claims that highlight intellectual property issues or misleading marketing will not be covered under this insurance.
Eligibility criteria for professional Liability insurance for Freelancers
This insurance is mainly available for independent contractors, sole proprietors, and Limited Liability Company owners.
If you are a freelancer from industries like IT, consulting, design, marketing, writing, and other services you are eligible for this insurance.
There are some insurers who may ask for relevant certifications, work experience, and licenses to be eligible for this insurance.
If you have a clean claim record with no previous liability, it heightens your eligibility for getting the insurance.
Benefits of having Professional Liability Insurance
Helps Mitigate Financial Losses
The expenses related to lawsuits can be very costly and it can hamper your business deals in the future as well. Professional liability insurance can help cover such expenses by protecting the professionals from burdening legal charges.
It can boost credibility and trust.
If your clients will know you have comprehensive liability coverage, it will provide them with a sense of confidence and security. It assures them that nothing will go wrong and all the work will be done systematically. Through this, your credibility in the market also increases.
It delivers peace of mind.
You can achieve peace of mind along with your liability insurance. You can work conveniently without the fear of financial ruin and mistakes. So you can ensure the results are quality-driven.
Makes sure you are protected
No matter if you are handling complicated projects or managing the diversifying demands of the industry. This insurance will make you stay away from potential liabilities and you can dedicatedly focus on your work.
Difference between professional liability and general liability insurance
Professional liability insurance covers claims of negligence, errors, and poor service. On the other hand, general liability insurance covers property damage, bodily injury, and third-party accidents.
Professional liability insurance is mainly adopted by consultants, freelancers, writers, etc. Whereas, general liability insurance is adopted by contractors, business owners, and freelancers.
PLI covers legal charges related to service-related disturbances. GLI covers legal charges for damage claims and physical injuries.
Frequently Asked Questions about freelance professional insurance
No, it is not mandatory for freelancers working in the UAE to get professional liability insurance. However, it is highly recommended as many clients consider it as a required license.
Freelancer’s professional liability insurance covers claims related to errors, professional negligence, and regulatory violations in your services.
The professional liability insurance cost for freelancers in the UAE differs as per various factors such as risk exposure, industry type, coverage limits, etc. But it is generally affordable.
Factors that influence the premium rates for professional liability insurance include business experience, geographical location, claim history, number of employees, coverage limits, etc.
Yes, freelancers can customize their professional liability insurance coverage to some extent as per their service requirements. Even many insurers provide personalized insurance plans for this.
If your client accuses you of negligence or breach of contract, make sure to inform your insurer. The experts will review the claim further, and you need to gather proper documentation to support your case and settle the claim.
It completely depends on your insurer’s terms and conditions and how effectively it is covering the geographical range outside the UAE.
It depends on the type of insurance you prefer and the nature of the claims it covers. So, you should discuss this with your insurer and ask for their assistance.
