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Professional Indemnity Insurance | Westralian Insurance
Tyler Vogelsberg • Aug 16, 2018
Why Professional Indemnity Insurance Is a MUST for Digital Freelancers
Aside from the allure of waking up late and working in pyjamas, one of the main reasons many self-sufficient people are drawn to the world of online freelancing is that it seems easier than setting up a traditional, physical business.
Of course, while becoming a digital freelancer doesn't require as much form-filling as opening a shop or becoming a tradesperson, that doesn't mean online freelancers are exempt from the typical infrastructure of a traditional business.
Insurance, in particular, is one business requirement that many digital freelancers don't think they need. However, that couldn't be further from the truth. Those who freelance online need to be protected from financial risk just as much as traditional businesspeople do.
One area you'll definitely want to be covered is Professional Indemnity. Never heard of it or not sure how it applies to you as a digital freelancer? Here's all you need to know.
What Is Professional Indemnity Insurance?
Sometimes referred to as Professional Liability insurance or simply PI, Professional Indemnity insurance is insurance that will cover your legal costs and other expenses, in the event that one of your clients loses money or business as a result of the services you've provided. For example, a tax agent providing incorrect advice which led to a client's business losing money; or a graphic designer creating a new logo that was similar to a copyrighted design, which led to legal proceedings against their client.
In short, you'll be financially protected if you make a mistake when giving advice, selling your skills or handling a client's assets.
Who Is It Right For?
Professional Indemnity insurance is a must for digital freelancers in most sectors because this type of freelance work almost always involves selling specialist knowledge and skills that a client is relying on.
Some of the common types of online freelancers who need Professional Indemnity insurance include:
- Accountants
- Graphic Designers
- Web and software developers
- Marketers and consultants
- Translators
- Tutors
Essentially, anyone who provides a professional service should consider Professional Indemnity insurance.
Why Is It Really Necessary?
Since Professional Indemnity insurance isn't compulsory by law, many online freelancers don't think it's really necessary. However, it's important to remember that mistakes can happen to anyone. Even if you're one of the most well-trained, skilled and knowledgeable professionals in your field, you can't guarantee that every service you render will be perfect.
Don't underestimate how much money a client could lose over even the smallest of mistakes. Just imagine the potential losses if you made a coding typo that stopped a client's e-commerce website from working during a big sale or mistranslated a sentence so it painted the quotee in a bad light.
Having insurance gives you the peace of mind, knowing that you're financially covered if an honest mistake does happen. You won't end up in a position where you have to sell your personal assets or lose your business to defend yourself.
Comprehensive Professional Indemnity cover will also come in handy if you decide to grow your freelance business and hire employees in the future, protecting you against their negligence. Plus, if you decide to retire from digital work, you'll be able to switch to run-off cover that insures you against future claims.
In short, working in the virtual world can get you in physical trouble, but Professional Indemnity insurance can get you out of it. If you’d like a free quote or want more advice about other types of insurance that online freelancers benefit from (such as Cyber Insurance, Management Liability and cover for your work computer), contact us
at Westralian Insurance by phone or web.
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Terms, conditions, limits and exclusions apply to the products referred to above. The information provided here is general advice only and has been prepared without taking into account your objectives, financial situation or needs. You should consider these, having regard to the appropriateness of this advice, and the relevant Product Disclosure Statement, available by calling us on (08) 9302 1388, before deciding to acquire, or to continue to hold, this product.
Ph: 08 9302 1388
Email: info@westralianinsurance.com.au
Lugarno Holdings Pty Ltd trading as Westralian Insurance
Address: Suite 12/1 Irwin Road
Wangara WA 6065
Monday to Friday 8:00am – 5:00pm
Lugarno Holdings Pty Ltd trading as Westralian Insurance
ABN 27 110 436 005
AFSL No. 331147
