With Jack: Insurance

This article is written by Ashley Baxter at With Jack, who provides insurance for freelancers.

“I’ve been freelancing for 6 years and have never had any issues so I don’t need insurance.” As someone who has been in the trenches with freelancers for almost a decade, this is the most dangerous mindset to have. I have seen enough to know that accidents arise, mistakes happen and difficult clients are out there.

Maybe you are careful and good at spotting bad clients, but having insurance running quietly in the background for those times where luck runs out or a difficult client slips through the cracks is the difference in getting back to work quickly. I don’t like shock or spook tactics so we’ll let the data talk for itself by looking at our most common claims and how we can prevent them.

Accidental damage to work equipment

Contents insurance is the most used product when it comes to making a claim. Accidental damage happens, especially amongst those who take your kit out and about with you regularly. Think photographers and videographers on location or those of you who enjoy working remotely in cafes and elsewhere. We see a ton of cracked laptop screens or spilled liquid claims.

Assuming you’re already careful with your kit, there isn’t much you can do to prevent accidental damage. It’s just one of those unlucky mishaps. But if you don’t have the capital to walk out and replace lost, stolen or damaged kit, you should consider getting contents insurance.

A lot of people ask if their home insurance covers their kit used in connection with their business. The truth is that’s a question for your home insurer! I can say, though, there are a few benefits to having a business equipment policy. Typically quicker turnaround with claims payouts since the insurer understands you’re dependent on your kit, and additional policy features. Which brings me onto my next most common claim with equipment…

Data recovery costs

If your hard drive or CF card becomes corrupt as a result of accidental damage and the data can’t be read, the insurer will pay for a data recovery company to reconstitute the data. This is especially common with photographers whose cameras or portable hard drives take a knock when shooting on location and they need to recover the footage.

Recovering data is expensive. I think our cheapest claim for this is £1200 but typically they sit closer to the £3000+ mark. If you’re storing client work or have important data on hard drives, this is a useful feature to have in the event your storage becomes corrupt.

It’s important to have a good back-up workflow just in case something does go wrong so you’re not overly reliant on your insurance. We cover this on our YouTube channel by speaking to experts in the space. You can find some good tips on there, but the best practice is to have:

• two hard drive back-ups
• one copy in the cloud
• a hard copy stored somewhere safe
• data recovery insurance

Non-payment

It will be no surprise that late or non-payment is one of our most common claims. Depending on the context of non-payment there are a few different insurance products that can help you.

The most common one is the debt recovery service provided by the legal expenses insurer. This is particularly effective when a client is ghosting you because the insurer appoints a solicitor to do the chasing for you. Having a third-party get involved sends a signal to the client that you mean business and will stop at nothing to get paid!

There does need to be a 51% or greater chance of recovery. This means that if your client isn’t paying you due to insolvency the policy couldn’t help.

The best thing to do to mitigate the risk of payment issues is a due diligence check before you onboard your client. This can highlight any financial difficulties or uncover a history of payment disputes. It will tell you whether this is a company you want to be doing business with or not. You can also amend your payment terms to protect yourself—like collecting a larger deposit upfront.

If a client isn’t paying you because they’re dissatisfied with your professional services, this is something the mitigation costs clause in the professional indemnity policy can assist with where the insurer pays you the amount owed to you assuming it will avoid a claim for a greater amount. Usually this would be down to disputes with the scope or disruption caused by late delivery of your work.

To avoid this, try investing in project management much like any other skillset in your business. This course on project management from SuperHi looks like a good place to start.

Negligence

Negligence covers a broad spectrum which is why it’s one of the most triggered parts of the professional indemnity policy.

If you make a mistake in your work, whether it’s a bug in your code that stopped the app functioning as expected, or a typo on the packaging you designed that now needs reprinted, or a marketing campaign that accidentally targeted the wrong audience, the client can seek to recover the costs of addressing these issues from you.

We’ve noticed that the mistake doesn’t always originate with the freelancer and is sometimes caused by external factors or even the client themselves, but nothing stops the client from pointing their finger at the freelancer.

Since negligence is there for the times you do slip up, there isn’t much that can be done to prevent that since humans make mistakes. That’s why it’s important to have a policy running in the background so that it’s ready to spring into action should you ever need to use it.

Maybe you are really good at avoiding mishaps, but the truth is freelancing isn’t just about you—it’s also about the client. They have every right to know they’re getting into business with an insured professional that can handle disruption should it happen.