Freelancer insurance cost: what sets your premium
There is no standard price for freelance insurance. Answer eight questions to see which covers to get quoted for, what will push your premium up or down, and what to have ready before you ask.
Why this page doesn't show a price
Insurers price each business individually, and they don't publish rate cards. An earlier version of this page printed an estimated premium from a simple model of our own. Those figures were not insurer data, so we have removed them. The only premium you can rely on is a quote for your own answers.
What we can do honestly is show you which answers move the price and which covers you actually need, so the quotes you collect are for the same cover and are easy to compare.
Your answers
Covers to get quoted for
What will move your premium
Have this ready before you ask for quotes
- A plain description of what you do and for whom (insurers will ask about your activities, not your job title).
- Your annual turnover or fee income, and an estimate for the next 12 months.
- The cover limits your contracts require, and where your clients are based.
- Details of any past claims, complaints or disputes.
- The excess you are willing to pay yourself on each claim.
- If you are switching insurer: your current policy schedule and its retroactive date.
When you buy business insurance you have a legal duty to make a fair presentation of the risk (Insurance Act 2015). Leaving out something material, such as a past claim or a type of work, can reduce or defeat a claim later. When in doubt, tell the insurer.
The answers that move a premium
Your activities
Insurers group businesses by what they do, because some activities lead to more claims, or larger ones, than others. Advice that a client relies on to make decisions (consulting, accountancy, HR, legal or technical specifications) generally carries more professional indemnity risk than writing or design. Work at clients' premises or at events carries more public liability risk than desk work. Describe what you really do: if you add a new type of work during the year, tell your insurer.
The limit of indemnity
The limit is the most the policy will pay. A higher limit costs more, but usually not in proportion: doubling the limit rarely doubles the premium. Pick the limit your contracts require, or the largest claim you could realistically face if your work went wrong, whichever is higher. Check whether the limit applies per claim ("any one claim") or to all claims in the year ("in the aggregate"): contracts often specify which.
Turnover and client size
Fee income is a rough measure of how much work you do and therefore how much could go wrong. Larger clients and larger projects can mean larger potential claims.
Where your clients are
Policies set a territorial limit (where you work) and a jurisdiction (whose courts a claim can be brought in). Some policies exclude or restrict claims brought in the USA or Canada, so if you have clients there, ask specifically and expect the answer to affect the price.
Claims history and the excess
Past claims, and complaints that could become claims, usually raise premiums and must be disclosed. Choosing a higher excess (the part of each claim you pay yourself) usually lowers the premium; only choose an excess you could afford to pay.
Tax that is added to the premium
Most general insurance, including business cover, carries Insurance Premium Tax at the standard rate of 12% (in force since 1 June 2017). Check whether a quote includes it before comparing.
Which covers are legal requirements
- Employers' liability is the main legal requirement. If you employ people you must hold it from the day you become an employer, with cover of at least £5 million from an authorised insurer. GOV.UK says the fine for not being properly insured is £2,500 for every day without cover. There are limited exemptions, for example for some family businesses; check GOV.UK: employers' liability insurance.
- Professional indemnity and public liability are not required by law for most freelancers, but clients often require them in contracts, and some professional bodies require PI for their members.
- Cyber and equipment cover are optional. Whether they are worth it depends on the data you hold and on whether you could replace your kit yourself.
Professional indemnity is usually sold on a "claims-made" basis: the policy that responds is the one in force when the claim is made, not when the work was done. If you stop trading or switch insurer, ask about run-off cover and keep the retroactive date unchanged.
Worked example: a remote web designer
Priya builds websites for small UK businesses from home. Her largest client contract asks for £1 million of professional indemnity. She stores clients' customer email lists in the sites she builds, never visits client offices and has no staff or past claims.
Her answers give: professional indemnity (required by contract, at £1 million), cyber (worth a quote because she handles personal data), and no employers' liability (no staff). Public liability is optional for her because she doesn't meet clients in person. She asks two providers to quote for the same £1 million PI limit, the same excess and the same UK territory, adds a cyber quote, and compares the totals including Insurance Premium Tax.
The premium is an allowable business expense: HMRC says you "can claim for any insurance policy for your business". For a sole trader paying basic-rate tax in 2026/27 that saves 20% income tax plus 6% Class 4 National Insurance, about 26p in every £1 of premium.
Frequently asked questions
Why don't you give an estimated price?
Insurers don't publish the rates they use, and premiums depend on answers that only a quote form captures. Any figure we printed would be our own guess, so we show what affects the price instead.
Is freelance insurance tax-deductible?
Yes. HMRC lists insurance among the costs you can claim if you're self-employed: "You can claim for any insurance policy for your business, for example public liability insurance." A limited company can also deduct business insurance it pays for.
Do I legally need insurance as a freelancer?
Only employers' liability is a legal requirement for most businesses, and only once you employ someone. Professional indemnity and public liability are usually contractual requirements rather than legal ones.
How do I compare quotes fairly?
Ask for the same limit (and the same "any one claim" or "aggregate" basis), the same excess, the same territory and jurisdiction, and the same activities. Then compare the total including Insurance Premium Tax, and read the main exclusions.
Sources (checked 2 November 2026)
- GOV.UK: Employers' liability insurance (£5 million minimum; £2,500 a day fine)
- HMRC: Insurance Premium Tax rates (standard rate 12% from 1 June 2017)
- GOV.UK: Expenses if you're self-employed (insurance policies)
- Insurance Act 2015, Part 2 (duty of fair presentation)
Related guides
General information, not insurance advice. FreelanceToolkit UK is not an insurance intermediary and does not arrange cover. Always read the policy wording before you buy.