A simple professional mistake can trigger a financial claim that puts your personal assets at risk if you're a freelancer. Professional liability insurance exists precisely to cover that risk, and in certain professions it's even mandatory.
What this insurance covers
It covers the compensation a freelancer might have to pay to third parties (clients or other people) for damages arising from errors, negligence, or omissions committed while carrying out their professional activity, generally including the legal defense costs associated with the claim.
In which activities it's mandatory
Certain regulated professions (lawyers, architects, engineers, among others) have a legal or professional-body obligation to hold this insurance as a requirement to practice, with minimum insured amounts set by their specific professional body or sector rules. Outside these regulated activities, taking out this insurance is usually voluntary, though advisable depending on the risk of the activity.
Why it can be worth it even when not mandatory
Activities such as consulting, training, and technical or creative services, even though not subject to a legal obligation, can generate significant claims if a mistake has financial consequences for the client. Without this insurance, that claim would fall directly on your personal assets as a sole trader.
What factors affect the cost of the premium
- The type of activity and its inherent level of risk.
- The insured capital contracted (the maximum coverage limit per claim and per year).
- Your revenue volume, since it tends to correlate with the size of potential claims.
- Your prior claims history, if you already had similar insurance in place.
Carefully review the policy's exclusions
Not all policies cover the same things: carefully review the exclusions (for example, claims arising from willful misconduct, or certain specific activities not covered) before signing up, to avoid surprises when you actually need the coverage.
This expense is deductible in your activity
As an expense directly linked to your professional activity, the premium for this insurance is deductible both for VAT purposes (if applicable) and for IRPF. Our VAT calculator helps you check the breakdown of this and other deductible expenses in your business.