Across the UK, there are millions of freelancers and self-employed consultants delivering almost any service that a business could need – from graphic design and PR to film production. And this number continues to grow too, as it remains an attractive way of working for the individual as well as an easier way for businesses to scale.
Yet whilst operating on a freelance basis can increase your sense of freedom and even your potential earnings, it does shift some responsibilities onto your shoulders. Namely, it’s down to you to ensure you have the right insurance in place to protect yourself.
In this blog, we explore one crucial form of insurance that many freelancers overlook – and the dangers of doing so.
The often-forgotten protection
Most freelancers we speak to understand the need for Professional Indemnity insurance, and often Public Liability cover too – depending on the services they provide. But very few consider whether they have an obligation to obtain Employers’ Liability insurance.
For a lot of freelancers, there’s no requirement to have protection in the form of an Employers’ Liability policy. After all, they’re sat working for themselves, from home or a co-working space, purely delivering their own services. However, that’s not the case for all self-employed workers. There are freelancers who coordinate the work of other individuals, for example – and this is where grey areas begin to pop up.
It’s easy for a self-employed freelancer to question why they would ever be required to hold Employers’ Liability insurance when they don’t directly employ anyone. And it’s a legitimate question too – there’s a great deal of confusion around this subject out there. But it all becomes a lot clearer once the legislation and principles of ensuring a safe system of work are explained…
Why do you need Employers’ Liability insurance?
It’s not as simple as whether you’re paying a salary to an employee or not – there’s a lot more to it than that. If you’re engaging someone under a contract to deliver a service – even an oral contract – and you control their system of work, it is highly likely you would be deemed to be their employer in the event of a workplace accident. That makes you liable.
As the HSE state: “What matters is the real nature of your relationship with the people who work for you and the nature and degree of control that you have over the work they do.”
It’s also a myth that a monetary payment needs to be made in order for someone to be legally obliged to purchase Employers’ Liability insurance. The rules also cover anyone that may volunteer or assist you on an unpaid basis – so even something as simple as asking a friend to hand out leaflets in the street would count.
A freelancer still has a duty of care to those carrying out tasks for them – just as a business that employs a salaried workforce does.
What could go wrong?
One of the most common industries to overlook this insurance is the film and video production sector. Here’s an example of when Employers’ Liability cover would typically be required:
A freelance videographer was engaged to provide video content for an advertising campaign. The brief was for an individual to perform several physical actions: rolling around, pretending to trip over, and collapsing to the ground.
The freelancer asked a friend to be their model, doing all the tumbling on the mats for the shots. All went well to begin with, and other than a few bumps and bruises, everyone was happy on the day.
Two weeks after the shoot finished, the volunteer started to complain of neck and back pain. Cue a trip to the doctor, a discussion with a personal injury solicitor, and a letter of claim.
The claim was made against the freelancer for injuries sustained whilst under their guidance and instructions. It was a clear and valid Employers’ Liability claim, which would have been picked up and paid for in its entirety by insurers if the insurance was in place, but it wasn’t…
This experience was an expensive lesson for the freelancer, who not only had to pay for their legal costs and the compensation settlement, but also had to prepare themselves for a potential HSE fine for not having the correct insurance.
That freelancer now has Employers’ Liability cover in place.
What are the potential consequences of it going wrong?
It’s quite simple really. If a claim for any injury or illness is brought against you as a freelancer and you don’t have Employers’ Liability cover in place, the financial impact could be severe. You may have to defend the action with your own funds.
In addition, the HSE can fine you for not having Employers’ Liability cover when you should have. This can be as high as £2,500 per day for the period when the insurance should have been in place.
This becomes even more concerning when considering the potential latent impact of disease claims, such as asbestosis and repetitive strain injury, which can take decades to come to light. It’s for this reason that insurers need to keep detailed records on all Employers Liability policies .
Help protect yourself with RiskBox
To find out more about your potential areas of risk as a freelancer, or to arrange Employers’ Liability cover, speak to a member of our team.
We’ll take you through our five-step process, explaining how we gain a deep understanding of your business and its services before designing and implementing your bespoke insurance programme.