Professional indemnity insurance for freelancers - 6 years?

Kai_63

I am reviewing a contract where I would be a creative freelancer for an agency. The agency would then take on client jobs.

The contract states I need to have professional indemnity insurance for 6 years after any project has completed.

I know 6 years is standard where a company closes (e.g. they need protection for at least 6 years afterwards) but I wasn't sure whether this applies where I am the freelancer (sole trader), not the agency itself?

If anyone has any suggestions for good indemmity insurance that would also be appreciated. Thanks!

DE_612183

If the agency has to pay out to a client, they need to recover the money from you - hence you need the insurance cover.

Hiscox.

DullGreyGuy

Kai_63 said:

I am reviewing a contract where I would be a creative freelancer for an agency. The agency would then take on client jobs.

The contract states I need to have professional indemnity insurance for 6 years after any project has completed.

I know 6 years is standard where a company closes (e.g. they need protection for at least 6 years afterwards) but I wasn't sure whether this applies where I am the freelancer (sole trader), not the agency itself?

If anyone has any suggestions for good indemmity insurance that would also be appreciated. Thanks!

Professional indemnity is written on a Claims Made basis rather than Date of Loss basis which means you claim on the policy in force at the time a claim is made against you not the policy that is in force on the date the bad advice was given. Hence why you need to keep buying the insurance 

It's the other way around, if a company closes then there is no need for it to hold insurance because it no longer exists so it cannot be sued. As a sole trader the only way you cease to exist is by dying so there is no other mechanism to avoid a claim other than by holding insurance 

Remember you need to set an appropriate retroactive date on the policy but if you cease to offer the services you can buy a run off policy which is materially cheaper than if you are still providing services... ours went from £3,000 to £350 a year when we temporarily ceased activities

Kai_63

Thank you this is really helpful! I'll go ahead and take it out.