First, an important disclaimer. This book is intended to provide you with the tools to turn your passion into a business or career and is based on my real-life experience of doing just that – as well as many lessons I’ve learned from others. I’m neither a lawyer nor an accountant (although I have paid a few in my time!) and nothing in this book is intended to constitute legal or financial advice or to substitute for the opinion of a suitably qualified professional who understands your circumstances. This section in particular is nothing more than an illustration of the principal areas in which you might need to seek professional guidance.
From a legal perspective there are three main areas that every freelancer needs to be aware of (plus there may be additional requirements specific to the sector you work in). These are
Your terms and conditions cover the small print common to every job and set out in legal terms what you expect from a client when you work with them. They should be attached to every proposal and invoice you send to a client. Whilst the majority of the time you won’t pay much attention to your terms and conditions once they are written, they are essential if a client relationship breaks down as it will be these that are scrutinized to understand the legal basis of your dispute.
You can hire a solicitor to write them for you, although this can be quite expensive. Many trade associations and professional bodies that support freelancers also offer legal-services support and templates that do the same job – probably for less money and more upside as you will be part of a community of like-minded freelancers.
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. It is protected by law through patents, copyright and trademarks.
An example of IP creation is when you hire a photographer for a photoshoot. The photographer will own the copyright in the photos they take. You will need to license or be assigned the copyright in the photos in return for an agreed sum, in addition to the photographer’s fee for taking the photos.
If your work involves IP creation then you must be clear in your pricing, terms and conditions and communications with clients what they are buying and where the ownership will lie at the conclusion of the agreement. For example, if you are a graphic designer and you are engaged to design a company’s new logo for their business, they are going to require that the logo designs you create for them during this process are fully assigned to them worldwide in perpetuity. It is their brand, after all; however, you may wish to charge them accordingly.
A non-disclosure agreement (NDA) – sometimes referred to as a confidentiality agreement – is a legal agreement between two or more parties that outlines confidential information they wish to exchange for the purposes of working together, or when considering working together. It creates a duty of confidence to protect trade secrets or confidential or proprietary information not in the public domain.
You are most likely to come across them when a client or potential client needs to share confidential or otherwise sensitive information about a project with you and wants to ensure that information does not leak. They need to specify what is confidential and there are restrictions – for example, if the information is already in the public domain or gets there and didn’t come from you, you’re fine. Also, NDAS can’t be used to conceal criminal acts.
They are pretty standard in their terms – just remember that if you are subcontracting work, your subcontractors need to sign an NDA too. A word of warning: if an NDA appears too restrictive, wide-ranging or onerous, seek legal advice before you sign.
A professional body is an organization of people with a common interest. They charge an annual subscription and provide a range of services to their members. These will usually include lobbying government on their behalf, regular newsletters and events, plus legal support and contract services. Some professional bodies are standards based and some aren’t.
In the UK IPSE (The Association of Independent Professionals and the Self-Employed) is the largest membership body that represents freelancers. In the USA the Freelancers Union promotes the interests of independent workers.
There are four key areas here to consider – but again there may be more depending on the type of work you do. The four main areas are:
As well as these you also need to consider how freelancing might affect your personal insurance (e.g. life or accident cover) and your motor policy. It’s worth doing some research here as costs can vary widely. There are providers who specialize in freelancer insurance, such as GetDinghy in the UK and the Freelancers Union in partnership with Hiscox in the USA.
This is often required by clients and proof may be requested as part of contract negotiations. Public liability insurance protects you if clients or members of the public suffer personal injury or property damage because of your business. It can pay for the costs of subsequent legal expenses or compensation claims and is an integral cover for businesses that interact regularly with customers.
The minimum level of cover usually offered in the UK is £1 million but some larger companies and institutions may ask for higher cover. You will need to think about the types of customers you are working with and assess your levels of cover accordingly.
This is an important cover if you give advice or provide a professional service to clients. It can pay for compensation claims and legal fees that may arise if a client suffers a financial or professional loss due to negligence in your work – be that advice, services or designs. More specifically, professional indemnity insurance covers you for mistakes such as professional negligence, unintentional breaches of copyright or confidentiality, loss of documents or data, defamation or libel.
Even if you’ve done nothing wrong, the cost of defending yourself against these claims can be very high. Professional indemnity cover can help protect you against this risk.
If you work from home, don’t assume that your personal household insurance will cover your equipment and your office. Typically, cover will depend on the use of the home being for clerical purposes only (i.e. office work), and you may not be covered if you have any business visitors. If you work from home, the best thing to do first is to talk to your current insurer and explain your situation. They might ask for an additional premium on your current insurance. If you don’t tell your insurers and you need to make a claim, you might find that your insurance is invalid and that the claim won’t be paid.
Additionally, if you have specialist items of equipment you use to deliver your services you may find these hard to add to your home insurance policy, and should you suffer a loss or breakdown you may find that your home insurance cover doesn’t allow you to get up and running again as quickly as you would like, in which case specific business insurance may be preferable.
Employer’s liability insurance protects you against the cost of compensation claims arising from employee illness or injury sustained as a result of their work for you. If you employ people, then you are legally required to buy this cover. It is also worth checking with your insurer about hiring freelancers as, depending on the work they do for you, you may need to cover them.
In addition to your business insurances you may also want to consider personal insurance options as well, including:
Everyone’s requirements and circumstances are unique, so consult a qualified professional.
Don’t assume that your domestic motor policy will automatically cover you for your freelance operations. You must ensure you have appropriate cover for your vehicle for the work that you do.
There are different levels of business cover and you should choose the most appropriate for your needs. If you drive your car for business purposes only infrequently, a policy that covers private and occasional business use will probably be adequate. Private and business use is a step up and is aimed at people who regularly drive their car for business. Then there’s commercial car insurance, which is for people who rely on their car for their business, such as a courier or a private-hire vehicle.
If you carry equipment or tools in your vehicle, make sure you understand the conditions of cover. Some insurers will not cover your equipment, others will impose a claim limit. There will almost certainly be a raft of exclusions, so make sure you are aware of them and adhere to any conditions.
If you are self-employed, work alone and your work activity poses no potential risk to the health and safety of other workers or members of the public you are unlikely to come under health-and-safety legislation. Otherwise, the regulations will apply to you. As always, seek professional advice if you are unsure.
A ‘risk’ to the health and safety of others in the workplace means the likelihood of someone else being harmed or injured as a consequence of your work activity. You must consider the work you are doing and judge for yourself if it creates a risk to others or not. If you believe it does, then it is your responsibility to take appropriate steps to minimize or eliminate any risk to others.
Many people use the terms ‘hazard’ and ‘risk’ interchangeably. They are very different. For example a shark in an aquarium is a hazard. It’s only a risk if you decide to swim in the tank with it.
It is good practice when working in another company’s premises to provide evidence of your public liability insurance. In addition, you should also make yourself aware of their health-and-safety policy and ensure your work complies with it.
If you do believe there is a risk to the health and safety of others you should conduct a risk assessment.
A risk assessment is a tool to help you manage your safety and the safety of others. The aim is to prevent injury and illness through proper planning. Part of that planning will be the arrangements needed to deal with emergencies, including serious and imminent danger. There are five basic steps to preparing a risk assessment:
Risk assessment of any action/activity relies on the competence and experience of those individuals evaluating and supervising it. If such people are not already part of your core team then you will need to contract them in (examples in the film industry might include stunts, special effects, filming on water etc.) and have them supply their own supplementary risk assessment.