Home and car
Insurance is what accountants think is dull. But it is vital that freelance creatives get their insurance right. Even the basics of car and home insurance need to be considered.
Iggy Pop famously caused a stink when he started advertising Swiftcover and other musicians discovered that Swiftcover would not cover them. The firm backtracked very fast once the issue hit the headlines. But the example shows why those of us freelancing in the entertainment and media fields need to be very careful to ensure we re covered.
Utmost good faith
There’s no point in lying about what you do. Insurance is based on a principle called “utmost good faith” and lying is not part of that. If you lie, an insurer is entitled to refuse your claim and simply refund you your premium, leaving you uninsured.
For most creative freelances that means using an insurance broker who knows which insurers will happily cover us or who has strong personal relationships with underwriters (the people at insurance companies who decide which risks to cover).
One of the biggest risks is called third-party liability. If you are doing a job and it might involve giving a big-name celebrity a lift in your car or having them round for dinner, you face a huge third-party liability risk. If Elton John has to cancel his world tour because he got whiplash in your car when you ran into the back of someone, your insurance company will have to pay out for the whole cost of the cancelled tour.
So if you are never going to have the likes of Elton John in your car (or home) you need to explain that to your broker, who will explain that to the underwriter, who will then come up with a decent price.
The car’s the star
Most motor policies cover you only for personal use – called social, domestic and pleasure (SDP). Some will include commuting but only to a single fixed place of work. If you need to use your car to go anywhere other than that – and we freelances tend to have lots of other places we need to drive – you need to have business use added on. Technically this is free but insurers generally offer a discount for SDP-only policies, so you will see the premium rise if you want to add business use.
Similarly, you need to let your insurer know if you work from home. There are specialist home/office policies for those running a proper business with staff and equipment from home, but many home insurers can be nudged into adding business use onto their policies at little or no extra cost. But you must tell them
Honesty is the best policy
Telling an insurer all this information often involves more than filling out an online form from one of the price comparison sites. Also, a broker has a professional duty to get you appropriate insurance. They will ask you questions to see if you are risk-adverse or risk-seeking and recommend policies that suit while pointing out any exclusions that help keep the price down – if you store your equipment in an office normally don’t expect it to be covered if you bring it home and it gets stolen or damaged.
There comes a point when it makes more sense to switch to a professional policy for your specific needs – camera cover or a specialist musical instrument policy, for example. But it depends on each individual’s circumstances. Many freelances just need to be open and honest about their work and their insurance needs. A broker will then be able to find the best deal.
David Rogerson of broker Towergate said: “It’s a misunderstanding that if you are in the entertainment trades it will cost you.”