With the rise of contract workers and freelancers, the gig economy is booming at a rapid pace. It’s important to leverage the opportunity as well as protect yourself for uncertain events with the right insurance cover. 

 The UK gig economy is booming with its size doubling every three years, with a workforce of 4.7 million workers. This is possible due to the gradual entry of contract workers and freelancers in the gig industry over the years.  

 Better pay, independent working hours, and work-life balance attract freelancers to put effort into the gig industry. There are certain drawbacks of working in the gig industry; like variable income, no sick leave or holiday pay. That’s why insurance is a crucial aspect to grow as an independent freelancer or contract worker. 

 Read on to know more about the gig economy, right insurance covers for its workforce, and tips to make it sustainable in the long term. 

What is the Gig Economy?

A gig economy consists of temporary, short-term, and contract-based jobs. A person who performs these jobs is known as a gig worker or freelancer or an independent contractor. Unlike a traditional economy, the gig economy offers flexibility and independence to work with one or many employers. 

Who is a Gig Worker?

 A professional who participates in the gig economy is known as a gig worker. They complete projects and tasks assigned by the employer. Most of them include freelancers, independent artists.  

 Here are some professionals who are known as gig workers in the United Kingdom.  

• Independent artists (Singers, Writers, Actors, and Musicians) 
• Internet Entrepreneurs 
• Virtual Assistants 
• Freelance Creative Professionals (Copywriters, Editors, Graphic Designers and Video Creators) 
• Freelance Technical Professionals (Software Engineers, Web Developers, and Cloud Architect) 
• Private Hire Taxi Drivers 
• Delivery Drivers 
• Any worker who take contract-based and temporary jobs 

Why Gig Workers Need Insurance?

 Just like every business and profession, gig professionals also need insurance to protect them financially during an incident or recovery period. As a gig worker, you are your biggest asset, and your cash flow could hurt when you are not able to work or faced with unforeseen circumstances. That’s why an insurance policy is a necessity for you. 

Insurance Covers for Gig Workers

Just like the traditional economy, insurance for the gig economy serves different requirements and needs. The financial and operational necessities of a taxi driver are entirely different from that of an internet entrepreneur. That’s why companies design personalised insurance policies to cover gig workers. 

Scroll down the list further to know about the right insurance cover to protect you financially during an incident or emergency. 

Private Hire Taxi Driver

If you’re a private hire taxi driver, generally drivers who take rides from taxi companies and aggregators like Uber or Lyft and don’t have an orange light on the top of your vehicle. Then you will require a private hire taxi driver insurance cover. It’s a legal requirement to drive anywhere in the United Kingdom and acts as a financial safeguard. For more information, please read our taxi insurance guide here.  

Delivery Driver

If your profession involves delivering food, goods, and services. Then a standard car insurance coverage will not be able to cover you as you are using your vehicle commercially. You will require commercial car insurance while working as a delivery driver. Read more about insuring yourself here. 

Freelancers

This section is for freelance copywriters, digital marketers, software engineers, and graphic designers who work on independent contracts with companies as well as take projects from digital marketplaces like Upwork or People Per Hour.  

As a freelancer, you’ll need to signup for different types of insurance covers, including income protection insurance, Cyber, and data risk insurance and professional indemnity. Click here to know more about insurance covers for freelancers. 

Insurance Challenges for Gig Economy

The insurance industry is constantly working to meet the insurance requirements of gig workers and safeguard them financially. However, there are many reforms and transformations it needs to meet the challenges of the booming economy. 

The challenges of insuring gig economy are list below: 

Flexible Working Hours 

Unlike traditional industries, the working hours in a gig economy are flexible and not fix. Though it creates good work-life insurance for a freelancer, it is hard for the insurance providers to cover you for income protection insurance as you need to work a minimum of 16 hours per week to be eligible for the policy. 

No Sick Leave 

Another setback of the gig economy is the availability of no sick leave. This means if a gig worker or freelancer gets sick he will not be able to sustain the assigned tasks. This also increases the premium costs as the income protection plan becomes expensive while serving shorter deferred periods. 

Variable Income 

Freelancers work on different gigs offered to them at quoted and variable pricing. This makes their monthly income inconsistent. Thereby making it difficult for the insurance company to decide the right cover for the gig workers. Your income over a period of time also determines your eligibility for the insurance covers. 

Solutions To Insurance Challenges 

Policy providers making insurance policies flexible is the need of the hour so they can fulfill the financial necessities of the gig workers.  The nature of a gig economy is different from a traditional economy and demands extra care. This can only be achieved when the insurance cover can meet the requirements of the changing economic landscape and labor market. 

This can be achieved by:  

• Making the most of the available technologies and making insurance products more efficient. 
• Increasing the availability of reduced benefit options in the income protection cover. 
• Partner with firms to provide additional benefits to the gig worker. 

Gig Economy Insurance by Simple Insurance Solutions

 We at Simple Insurance Solutions understand the needs of the gig industry and we are expert in the insurance for gig economy professionals. Just let us know your professional details, answer basic questions. We will find the right insurance policy to cover you financially during an incident.