As an interior designer, taking out insurance is crucial for protecting your business from unexpected issues and costs if any problems should arise. From breakages to personal injury, loss of documents to project delays, anything can happen, and you could risk paying for someone’s loss of income or property damages out of your own pocket if you don’t have the right insurance cover. Insurance gives you the means to deal with issues and compensate clients, ensuring you can focus on running your business successfully.
While it’s not a legal requirement for interior designers to take out insurance, the bare minimum coverage any interior designer should consider is professional indemnity insurance that covers things like defamation, loss of data and employee dishonesty. However, there are plenty more insurance options depending on the risks your interior design firm may encounter. Clients may also insist on seeing your insurance cover before hiring your services.
So, if you’re still wondering if interior designers need insurance, the answer is a big yes. Here, we go into more detail on what type of insurance interior designers need and how much interior design insurance costs, so you have peace of mind that you and your design business are protected.
Different types of insurance for interior design business needs:
Professional indemnity insurance This type of insurance is essential for protecting you against clients who claim there is an issue with the services you have provided. For example, if a client or contractor believes you’ve made a mistake, given poor advice or have been negligent, and have caused them to lose money as a result, you can rely on professional indemnity insurance to help defend the claim and cover your legal costs when action is taken. Interior designer professional indemnity insurance can start at around £8 a month for £100K of cover, or around £300 annually for £1 million coverage. When gauging how much professional indemnity insurance you’ll need, consider the scope of your projects and how much money you would need to make-right the worst case scenario, including paying out legal fees and compensation.
This type of policy protects interior designers from claims of:
- Negligent misrepresentation - You’ll be covered for any allegations made against you by clients and third parties claiming that you’ve made mistakes or failed to do things that were agreed.
- Defamation - This cover will protect you if someone claims you have caused harm to their reputation or business.
- Loss of data - A policy can cover the cost of recovering lost documents or data.
- Employee dishonesty - If an employee steals money or stock, or commits a fraudulent act, this insurance will cover you.
- Breach of confidentiality - You’ll be covered if you accidentally share a client’s private information without their consent, leading to financial losses or damage to their reputation.
Public liability insurance
As an interior designer working on residential or commercial projects, you are likely to come into contact with many different people, including the public. Taking out public liability insurance can help with fees and compensation costs if a client or member of the public, such as a courier, decides to make a claim against you and your business following an alleged injury to themselves or their property. This type of insurance will cost around £4 a month for £1,000,000 of cover for any damage and injuries caused by your business. It’s worth considering adding product liability to your public liability cover, to protect you from compensation fees should any products you custom design, supply or sell to clients cause injury or damage.
Employers’ liability insurance
As soon as you decided to employ someone else in your company, such as another interior designer or assistant to help you, it is a legal requirement to take out
employers’ liability insurance covering them as soon as you become an employer. If you don’t have the correct employers’ liability insurance, your business could be fined up to £2,500 for each day it isn’t covered. The only time you won’t need this insurance is if you're employing a member of your family or someone who works abroad. Employers’ liability insurance can cover claims from permanent employees, contracted employees, temporary staff, interns, people on work experience and labour-only subcontractors. This type of policy will also help you cover any compensation costs if an employee is injured or becomes unwell as a result of work they’ve done for you. Expect to pay around £5 a month, or around £61/year for a small to medium-sized business in the UK.
Tip: Ask for your insurance company to send you proof of cover, such as a certificate via email, so you have it ready to show clients or contractors they might ask to see it before signing contracts.
Other types of insurance interior designers may need:
Depending on certain aspects of your business, such as whether you own specific equipment, there may be other insurance policies that your interior design operation requires in addition to the ones mentioned above. Here are some further suggestions:
Business equipment insurance - As an interior designer, you’ll most definitely have a smartphone, but perhaps you’ll also have a digital camera for taking professional photographs of your work, or even an iPad for showing clients digital mood boards. Whatever equipment you rely on to conduct your interior design business, you need it protected by business equipment insurance should it need repairing or replacing. This type of insurance can also cover your employee’s equipment too should it be accidentally damaged, lost or stolen. Expect to pay from around £3 a month, or around £80 annually.
Income Protection Insurance - Also known as personal accident insurance, this policy offers financial help should you be unable to work due to sickness or injury. Anyone who is self-employed, doesn’t receive sick pay, lacks savings to fall back on and doesn’t have another form of income (eg. from a partner), then this insurance is really worth considering. You’ll be looking at a premium starting around £3 a month for up to 70% of your salary if you are unable to work.
Cyber Liability Insurance - With cybercrime on the rise, more companies are looking to protect their computer systems and valuable data with cyber liability insurance that provides financial support in the event of a data breach. This will minimise the disruption to your company, and ensure your business stays on track while recovering from a cyber-attack or hacking threat. Expect to pay a premium of around £5 a month for this type of cover.
Example scenarios when interior designers benefit from insurance
Below are some common situations where interior designers may need the different types of insurance outlined above:
Scenario 1 - Professional indemnity insurance
You are on a busy, stressful project and you find yourself under pressure causing you to accidentally sign off the wrong paint colour. This results in costly delays while you rectify the situation. Professional indemnity insurance helps you cover the cost of having the property redecorated, plus any compensation owed to subcontractors and clients for the delay.
Scenario 2 - Public liability insurance
A delivery driver carrying a heavy box slips and falls while delivering to your project site. Fortunately, your public liability insurance will cover you for the driver’s loss of income, as well as any legal costs.
Scenario 3 - Business equipment insurance
Rushing to a business meeting, you leave your laptop on the train. Fortunately, you are able to recuperate the cost of replacing the valuable item through your business equipment insurance.
Scenario 4 - Employers’ liability insurance
An intern carrying heavy rolls of fabric from your car hurts their back. Fortunately, you have the right employers’ liability insurance in place to ensure both you and your employee are covered and any payouts are met by the policy.
Conclusion
Despite interior design being a relatively risk-free profession, working closely with clients, within properties, and with valuable items can dish up some unexpected situations. So yes, interior designers do need insurance. Being covered for every scenario will ensure you and your business are protected.
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