Do Freelancers Need Business Insurance? (UK Guide 2026)
If you’re freelancing in the UK, whether full-time or on the side, you might be wondering whether you actually need business insurance. The answer is simple:
- Most freelancers aren’t legally required to have insurance, but many rely on it to protect their income, equipment, and client relationships.
- Some situations do make insurance effectively mandatory (e.g., certain contracts, hiring employees, industry regulations).
This guide breaks down exactly what cover you need in 2026, what’s optional, and when insurance becomes essential.
✔️ Do Freelancers Legally Need Insurance?
Most UK freelancers don’t have a legal obligation to take out business insurance.
However, there are three situations where insurance is required:
1. If you hire employees or subcontractors
You must legally hold Employers’ Liability Insurance — even for part-time staff.
2. If your client contract requires it
Many clients (especially agencies, tech companies, design studios, and corporates) require:
- Public Liability Insurance
-
Professional Indemnity Insurance
Not having these can disqualify you from the project.
3. If you work in a regulated profession
Examples include:
- Accountants
- Financial advisers
- Architects
- Legal professionals
These fields may require Professional Indemnity Insurance.
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🛡️The Most Common Types of Freelancer Insurance
Here are the core policies freelancers typically consider.
Public Liability Insurance
Protects you if you accidentally injure someone or damage property while working.
Useful for:
- Photographers
- Event freelancers
- Trades
- Anyone who works with the public or on-site
Professional Indemnity Insurance
Protects you if a client claims your work caused financial loss due to:
- mistakes
- missed deadlines
- bad advice
- negligence
Essential for:
- Designers
- Consultants
- Marketers
- Web developers
- Any freelancer whose ‘work’ = expertise
Equipment & Tools Insurance
Covers:
- laptops
- cameras
- tools
- devices
- kits
Helpful for anyone whose income relies on their kit.
Income Protection or Business Interruption
Protects you if you can’t work due to:
- illness
- injury
- long-term downtime
This is particularly important for freelancers with no sick pay safety net.
Employers’ Liability
Legally required if you employ anyone, even casually.
⚖️Why Insurance Is Worth Having (Even When Not Mandatory)
It makes you look more professional
Many clients see insurance as a sign of reliability and risk reduction.
It protects your income
One claim could wipe out several months of earnings.
It improves your chances of landing higher-paying contracts
Corporate and agency clients often won’t work with uninsured freelancers.
It can be a tax-deductible expense
Business insurance is generally an allowable business expense.
📊How Much Does Freelancer Insurance Cost in 2026?
Costs vary depending on cover and industry, but typical ranges are:
| Type of Cover | Typical Cost (per year) |
|---|---|
| Public Liability | £50–£150 |
| Professional Indemnity | £100–£250 |
| Tools & Equipment | £40–£120 |
| Income Protection | £15–£40 per month |
| Employers’ Liability | £120+ |
These are estimates — your exact quote will depend on your niche, clients, and risk level.
⭐ Where Freelancers Can Buy Insurance
👉 Read our new insurance providers comparison guide for 2026
Recommended provider:
👉 PolicyBee — simple, affordable cover for freelancers, consultants, and small businesses.
🎯When Freelancers Should Definitely Get Insurance
You should consider taking out cover if:
- You work with clients on-site
- You handle expensive equipment
- You deliver advice, design, consulting, or digital work
- You work with agencies that require PI or PL
- You rely entirely on your income with no safety net
- You’re growing or planning to hire help
If any of these apply, insurance isn’t just optional — it’s smart protection.
📌Conclusion
Insurance isn’t legally required for most freelancers — but it’s one of the easiest ways to protect your business, maintain client confidence, and secure better contracts.
For most people, starting with:
- Public Liability Insurance, and
-
Professional Indemnity Insurance
is enough to stay protected and professional.