Liam Greene from Markel Direct, experts in professional indemnity insurance, detail the top 5 costly risks that arise when freelancers work from home
As government support schemes come to an end this month, freelancing may seem like an attractive option for those who may recently have become redundant, or simply for those who are looking for a career change and don’t enjoy working a regular 9-5 job. The benefits of becoming a freelancer can be hugely rewarding – increased flexibility, the autonomy of ‘being your own boss’ and the freedom to work on only the projects you want to. However, starting your own business during COVID-19 means increased risks for freelancers working from home, so it’s important for both experienced freelancers and those who are exploring their options in self-employment, to fully understand key considerations that could help avoid costly client claims.
In the current climate, there is increased pressure on all workers to be ultra-responsive. It’s easy to slip up in such a climate.
From emailing the wrong person a confidential file to making a typo in the work you send to a client, these errors could see a dispute arise with your client, or even a professional indemnity claim brought against you – particularly if the mistake costs them money.
It’s useful to list out each action in the process of the work you’re doing, however insignificant it may seem at the time, to ensure you’re ticking all the boxes before anything is sent to the client.
Keeping data secure
Freelancers who work closely with client data may be at greater risk whilst WFH, particularly those who have confidentiality agreements. Using personal email addresses or devices can present risk-riddled scenarios where private data could be stolen.
For example, an email inbox containing confidential files could be compromised, or a security vulnerability in devices exploited – both of which could lead to a data breach.
To prevent these mistakes, it’s important that you secure files with password encryption, store them in accordance with your client’s requirements, and keep operating systems up to date.
Contracts between freelancers and clients are being disrupted, resulting in projects being delayed and deliverables changing – but client expectations remain high.
If a client is dissatisfied with work, it could lead to a dispute or a negligence claim. Although these may not be successful, freelancers could incur costs to defend the claim (which professional indemnity insurance can cover against).
Phishing emails have become increasingly sophisticated and unscrupulous groups are taking advantage of the pandemic to target freelancers.
Freelancers who are responsible for handling client money should take extra care not to fall victim to fraudulent emails; simple measures, like contacting a supplier to check any unexpected invoices, can help.
Similarly, platforms freelancers use to issue invoices may be targeted and hackers could change bank details held in the account and issue invoices to your clients.
Ensuring you have security enabled on your account, such as two-factor authentication, provides an additional protection measure so if your account is compromised, a second method of authorisation will prevent cyber criminals from gaining access.
It may be tempting to save money by cancelling insurance cover, but unless freelancers keep their professional indemnity policy live, they won’t be covered for past work. As policies need to be live at both the time the work is done and when the claim is made, it’s vital the policy isn’t cancelled to ensure you’re covered for past work.
If you’re struggling to pay premiums, speak to your insurer – they are likely to have options to help you at this time.
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