Thinking about recent media or content that spoke to your soul? Yeah, empowering and inspiring. Freelancing gives you a lot of freedom: You can work how, when, and where you want, control your schedule and pick projects that matter most to you. But running your own business also means assuming responsibilities that regular employees don’t need to consider like your own health insurance, savings for retirement, and protection for your business. The need for freelancers’ insurance is one of the most important things that freelancers often forget.
This article will get into the types of insurance freelancers should consider, why you should care and how to protect yourself and your freelance business while working independently.
Why Should Freelancers Get Insurance?
Life as a freelancer means you’re the one at the steering wheel, and you guide your own work, health, and finances. You aren’t like a traditional employee you don’t have an employer who will offer your health benefits, workers’ compensation or liability insurance. This leaves you vulnerable to risks which, if something goes wrong, can be financially catastrophic.
The unique risks that freelancers face in their business So, if you find yourself unable to work due to an injury, you may have no backup source of income. If a client sues you for mistaking information in your work, you could be held individually liable for legal fees and damage costs. When it comes to being prepared for the unexpected, there is nothing quite as important as the right insurance coverage.
Essential Types of Insurance for Freelancers
Freelancers can get overwhelmed thinking about insurance and what, if any, types they need… Here are some types of insurance freelancers should consider to protect themselves, their business, and their income:
Health Insurance
As a freelancer, you do not benefit from employer-sponsored health insurance. That means you will have to seek your own plan. Health insurance is valuable because it provides coverage for many important medical expenses, such as doctor visits, prescriptions, and emergency care. Without it, surprise medical bills may wreak havoc on your finances.
In many nations, freelancers can apply for health insurance through the government marketplaces (in the U.S. a part of the Affordable Care Act) or buy a private plan. Make sure to shop around to find a plan that fits your budget and provides you with the necessary coverage.
Errors & Omissions Insurance (Professional Liability Insurance)
If you’re a freelancer selling services including consulting, writing, design or web development you can be sued if a client feels you caused them financial damage. Professional liability insurance (sometimes referred to as errors and omissions insurance) protects you if a client sues you for mistakes, negligence or missed deadlines in your work.
This type of insurance pays for legal fees, settlements, and the damages if you’re at fault. This is especially important if your clients tend to be high-profile, or your projects are complex enough that mistakes could result in major financial losses.
General Liability Insurance
Professional liability insurance protects you from claims associated with the work you perform, while general liability insurance protects you in the event an incident occurs on your business property or while dealing with a client. If a client pays you a visit to your home office and slips, injuring themselves, general liability insurance will cover their medical expenses, and legal costs if they choose to sue.
If you have an office, meet customers in person, or do any work that could physically injure someone or cause damage to property, this type of insurance is critical.
Workers’ Compensation Insurance
Workers’ compensation insurance is typically used to protect employees who are injured while at work. But as a freelancer, you also may want to pursue a policy on your own if you’re in a profession that includes the risk of physical injury, such as construction or manual labor.
Workers’ compensation can also pay your medical bills, your lost wages and rehabilitation costs if you’re injured and can’t work. Depending on what you do, some states or countries will require freelancers to have this type of coverage.
Income Protection Insurance
As a freelancer, you are paid for the work you do. If you are sick or have an injury in the workplace and cannot work, you may lose your income. Income protection insurance (known as disability insurance) pays a percentage of your lost income if you’re unable to work because of illness or injury.
Having such type of insurance can help financially through the tough time in that it can keep you afloat with your regular bills without the loss of income or provide you some time to rehabilitate before getting back to work.
Business Property Insurance
General liability insurance gives you coverage from any bodily injury or property damage to a third-party that may arise from your place of business. This insurance for your commercial property helps you replace or repair your business assets if they are damaged, stolen, or destroyed in a fire or natural disaster.
This is useful in particular if you have costly machinery that you rely on in your daily operations or if your office has valuable items that you must input in your business.
Cyber Liability Insurance
Cyber liability insurance is especially important for freelancers working in the tech industry, as well as those handling sensitive data or managing client information online. This liability covers you for a data breach, a hacking incident, or if client data is lost or stolen from your systems.
As more and more businesses are going online, cybersecurity threats is a rising concern. If your work or client data is compromised by a cyber-attack, cyber liability insurance can help pay for data recovery, legal fees, and reputational damage.
Additional Considerations About Freelance Insurance
The type of insurance you choose will depend on the nature of your freelance work and how much risk you are willing to take. Here are tips to determine which insurance you may need:
Assess Your Risks
Factor in the risks that go along with your work. Do you work in a sensitive industry or have sensitive data? Does your job involve people where you are physically active OR do you work long hours on a computer? Knowing your exact risks will help inform your coverage decision.
Start with Health Insurance
Every freelancer prioritizes health insurance. Health insurance whether through a government marketplace, a private insurer or professional association will protect you from unexpected medical costs.
Consider Professional Liability
If your freelance work requires you to offer advice or create products or work that can be examined or critiqued, you’ll need professional liability insurance. It also protects you from potential legal action if a client is dissatisfied with your work.
Assess the General Liability and Property Insurance
General liability and property insurance can add extra protection if you have a physical office, still interact with customers in person, or use expensive equipment.
Plan for the Future
Freelancers must also look long-term. Disability or income protection insurance guarantees that you don’t lose your income if you’re unable to work for a longer period.
Speak to an Insurance Agent
An insurance frequent flyer specifically handling freelance or small business insurance can help guide you in choosing the correct coverage. They can assist you with understanding your needs, and help you discover plans that will stay within your budget.
Conclusion
Being a freelancer means that you are wearing many hats and doing a lot of work. Insurance is one of the most critical things you need to buy to shield yourself, your work, and your business. From health insurance and professional liability coverage to business property protection, your insurance coverage should be just that; coverage that provides peace of mind and shields you from unforeseen risk. Evaluating your specific needs and searching for various insurance options is essential when considering the appropriate coverage for your freelance business.
