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Finance guidance offered to freelancers as WFH risks could cause costly claims

By Liam Greene is the Underwriting Manager for Professional and Management Risks at Markel Direct, experts in professional indemnity insurance.

As COVID-19 impacts finances, flexibility and futures, freelancers are also facing hurdles at home that could see them affected by costly client claims.

From technology risks, to delayed projects, ever-changing deliverables and updated contract periods: the pandemic has caused many contractors to face the effect of these changes. But despite the budget cuts and contract alterations, many clients still expect the same results. A dissatisfied client could lead to a negligence claim.

This is just one of many reasons the new normal could cause insurance issues for freelancers who are working from home. In this article, you will find 5 major risks contractors should be wary of whilst conducting business remotely, and how to best avoid them:

  1. Increased pressure whilst working from home
  2. Keeping client data secure
  3. Disruptions between client contracts
  4. Increased risks of cyber attacks
  5. Risk of cancelling insurance cover

Let’s investigate each of these insurance threats in more detail:


In the current climate, there is an increased pressure on every worker to be ultra-responsive. In such a climate, it’s easy to slip up and make basic human mistakes.

From emailing the wrong person a confidential file to making a typo in the work you send to a client, these seemingly small errors could see a dispute arise with the client, or even result in a professional indemnity claim brought against the freelancer – particularly if the mistake costs the client money.

It’s useful to list out each action in the process of the work that is being done, however insignificant it may seem at the time, to ensure that all the boxes are being ticked 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 already have confidentiality agreements set up. Using personal email addresses or devices can present risk-riddled scenarios in which private data could be stolen.

Whilst contractors are not working on the client network, they will most likely be using their personal emails to send client data. This could become a data security issue if the email account is compromised.

For example, an email inbox containing confidential files could be compromised, or a security vulnerability in personal devices exploited – both of which could lead to a data breach. Working from home also makes it easier to send confidential attachments to the wrong person, or update operating systems to keep devices secure.

To prevent these mistakes, it’s important that you secure files in accordance with your client’s requirements (if your client doesn’t stipulate requirements, take a look at the ICO’s SME data protection web hub) and keep operating systems up to date.

Contract issues

Since the start of the pandemic, contracts between freelancers and clients are being disrupted and changing constantly. This results in projects being delayed, deliverables and specifications changing from what they originally were – but client expectations still remain high.

If a client is dissatisfied with work, it could lead to a dispute or a negligence claim. If the freelancer has done nothing wrong, these claims could be unsuccessful, but there will still be a cost to defend the claim (which professional indemnity insurance can cover against).

Cyber security

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 the bank details held in their account to their own bank details and issue invoices to your clients.

The client may then, unknowingly, make a payment to the fraudster, resulting in the suffering a loss and giving them grounds to pursue the freelancer under this cyber liability, alleging that insufficient security was in place for the contractor’s invoicing account.

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.

Cancelling cover

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 right now.