Liability blind spots in the gig economy

Johannesburg - Freelancer registrations in South Africa have surged by 53%, according to Outsized’s 2025 Talent-on-Demand Report, reflecting a growing appetite for flexible workforce solutions[1]. From engineering and technology to logistics and healthcare, more specialised individuals are earning a living through short-term contracts and on-demand platforms. While opportunity is growing, however, so too are the risks – and many gig workers are unknowingly leaving themselves exposed to costly liability claims.

This is according to Muofhe Tshifularo, Claims Specialist at Santam Specialist Casualty, who warns that a lack of awareness around insurance cover is leaving many individuals vulnerable in this expanding sector. “The gig economy thrives on speed, flexibility and independence, but these very qualities can mask the reality that gig workers face the same legal and financial risks as established businesses,” says Tshifularo. “Without adequate insurance protection, a single claim could wipe out months or even years of income.”

A common blind spot, Tshifularo notes, is the assumption that freelancers or subcontractors are automatically covered by their client’s insurance. “We see claims wherein a company outsources part of a project – for example, excavation work during a construction job – and the subcontractor damages Third Party property. The client’s insurance usually won’t extend to cover the subcontractor unless this is specifically underwritten. In practice, the legal liability often falls to the subcontractor, when third party damage occurs and without adequate insurance, the subcontractor may be left to manage the financial consequences alone,” she explains.

These risks extend across multiple sectors. For instance, a freelance project manager who makes a mistake that delays delivery could face claims for financial losses. A locum healthcare worker may face allegations of negligence, while a freelance technician could be liable for property damage.

“Many sole proprietors or one-person businesses don’t see themselves as ‘companies’, but from an insurance perspective, they are treated no differently. If a mistake causes loss or damage, the individual or the business can be held accountable,” Tshifularo adds.

This is where specific insurance solutions come in. Professional Indemnity (PI) cover indemnifies the Insured against legal liability arising from errors, omissions or negligent acts arising out of the conduct of the Profession, while Broadform Liability indemnifies Insureds against legal liability for damage or injury arising out of the performance of the Business. “Many gig workers either don’t know these products exist or assume their client’s policy will cover them, which is not always the case,” Tshifularo warns.

It’s not only freelancers who should take note. Small and medium-sized enterprises (SMEs) that rely on independent contractors may still be exposed to liability claims, especially if clients pursue them first before responsibility is redirected, if at all. “For a smaller business without the financial reserves of a large corporation, even a single uninsured liability claim can be financially devastating,” she says.

To address these gaps, Santam Specialist Casualty has developed insurance solutions tailored specifically to SMEs and gig workers to access the protection they need without having to take out multiple policies. “SMEs and freelancers can use one solution that combines key specialist covers for specific risks,” Tshifularo explains. “Our offering is not one-size-fits-all – we tailor policies to fit the client, whether they’re a sole proprietor or a growing small business.”

For Tshifularo, the immediate priority is raising awareness. “As South Africa’s workforce continues to evolve, so too must the tools that support it. Whether you are an independent contractor, a small business owner or a company working with external talent, understanding your insurance responsibilities is no longer optional, it’s essential.

By staying informed and choosing the right cover, gig workers and SMEs can build resilience, protect their livelihoods, and thrive in a dynamic economy.”