insurance blog

Freelance Business Insurance?

Working in the live events industry we can all agree is the ‘gig economy’. There are many combinations of engagements throughout the sector between individuals and companies of varying type, and the conventional relationship between Employer and Employee is challenged.. This can lead to confusion, or presumption, when it comes to business insurance, on who is “covered”, or who “covers” you. This article can hopefully provide some clarity to stage hands, technicians, freelancers, and company owners.

So firstly, who needs the insurance? We can put most individuals into two categories, Employed, or Self Employed.

“Employed” persons are those working directly for a company, on the payroll of the that company, usually with some kind of ongoing employment contract of terms, pay and hours. Variations of this include people on zero hours contracts, and other payroll schemes such as umbrella companies. Companies have a legal requirement to provide Employers Liability insurance for employees. In addition, any Public Liability insurance that the business has, covers its employees. If you are “Employed” in the conventional sense, you do not need to take out your own insurance.

“Self Employed” includes those working under their own Limited Companies, along with those working in Partnerships or as Sole Traders. To be adequately covered, these individuals must provide their own Public Liability insurance. However, any company engaging with freelancers as contractors or casual workers, has a legal duty to provide Employers Liability insurance that covers these individuals as well as their own employees.

Lets look at the two main types of insurance required in any business, and when it is needed.

PUBLIC LIABILITY

Public Liability insurance isn’t a legal requirement for businesses or individuals, although it is considered a necessary protection against potential compensation claims. This insurance pays out in the event of a mistake by any of your business activities which causes injury or damage to a customer or member of the public.

As an employee, you are carrying out the business activity of your employer, therefore you are covered by their public liability insurance whilst at work. In addition, a company you work for is legally required to provide Employers Liability,

As a self employed person of any type, the business you are working for is your customer. So any injury or damage caused carrying out tasks for your customer, could be subject to a claim for compensation.

Within workplaces of all kinds throughout the live events industry, best practice is to have a closed loop of Public Liability insurance. Which means that cover is in place at all levels from Client, to Principal Contractor, to Suppliers & Contractors, and individuals working on a freelance basis. So although Public Liability insurance isn’t a legal requirement, freelancers should always consider covering themselves under a policy that clearly states the type of work and tasks that they undertake, along with the size of their business i.e. turnover.

Employers Liability

As mentioned, Employers Liability insurance is legally required when a company employs people. This is a requirement set out by the Employer’s Liability (Compulsory Insurance) Act 1969 . The HMRC also applies a wide definition of “employee”, that can be confusing,.

 The theory is that the person who engages you for work, is the one to take on Employers Liability for you as an individual whilst at work for them,.

For example, you might be surprised to learn that temps, seasonal staff, volunteers, and freelancers and subcontractors of all kinds are classed as “employee” when it comes to Employers Liability insurance. Whether you are a casual stage hand in London, or a freelance production manager in Manchester, if you are engaged by a company as an individual providing a  labour based service,  then you should be covered by their Employers Liability insurance for any injury to you during that engagement.

Of course, there are other types of insurance, such as Professional Indemnity, Equipment Insurance, Buildings and Contents Insurance, Goods in Transit Insurance. These are more specialist, and serve the needs of specific business activities. In the first instance, individuals working independently should get their own Public Liability Insurance. Companies should have their own Public AND Employers Liability Insurance as a minimum.

Share this post

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email