Insurance for Freelancers

Insurance for Freelancers

Working as a freelancer can be incredibly rewarding. You set your own hours, choose your own clients, and generally work on your own terms.

But as they say, with great freedom comes great responsibility. As a freelancer, you are exposed to more risk than you would be as an employee. There is no one standing between you and all that could go wrong while operating your business. That is why you need freelance insurance.

Freelance insurance” does not refer to just one type of insurance. It refers to a whole range of different types of insurance policies which are useful to freelancers.

In this post, we will give you a rundown of common types of freelance insurance policies you may want to consider purchasing.

Insurance to Protect Your Business

freelancer insurance

Depending on what type of freelance business you run, there may be certain basic types of insurance you are required to have to maintain your license and operate legally.

Other types of insurance might be optional, however. And for some types of freelance businesses, there are no legal insurance requirements.

Even if that describes your business, you are still going to want to purchase at least some of the types of insurance below in order to protect yourself from certain medical costs, legal costs, and other unexpected expenses.

  • General liability insurance: This is the type of insurance that protects your business if someone slips and falls or if there are injuries or accidents in the workplace. The policy can pay out toward medical expenses or property damage costs. Note that it does not cover damage to you or your property, nor to any employees you might have. It simply covers damages to other people and property.

    This is one of the most basic types of insurance. If you are only going to invest in a couple of policies, this should usually be among them. Incidentally, it also can cover you in certain scenarios involving libel or slander, which can be a big help if a competitor claims you smeared their good name.
  • Professional liability insurance: Another type of insurance that you should strongly consider as a freelancer is professional liability insurance, also known as “errors and omissions” insurance.
  • Commercial auto insurance: You can get this type of insurance to get coverage for a vehicle you use for business purposes. Note that if you are simply driving your own personal vehicle to and from your gigs, you may not need to purchase commercial auto insurance because you should already have regular auto insurance.
  • Cybersecurity insurance: Do you conduct your freelance business online? If so, you may need to be concerned about the possibility of hacks, data breaches and other cybersecurity scams and attacks. Cybersecurity insurance can help protect you by covering legal expenses and other costs related to such attacks.
  • Business interruption insurance: One of the most precarious aspects of working as a freelancer is knowing that should something go wrong that stops you from conducting business as usual, the money will stop flowing. It is not like being an employee, where that is someone else’s problem and you still pull in a paycheck. Business interruption insurance can help you offset lost income in cases where certain issues (i.e. property damage) stop you from working.
  • Commercial property insurance: If you want to cover your businessproperty in cases such as theft or fire, you can purchase commercial property insurance.
  • Business Owner’s Policy (BOP): Freelancers who are searching for a policy that bundles together commercial property insurance with general liability insurance can get a business owner’s policy.
  • Types of insurance that are specific to your industry: Depending on what type of freelance business you operate, there may be specialized insurance products just for you. For example, let’s say you are a massage therapist. You can get specialized coverage for specific modalities (i.e. Swedish massage, fire cupping, etc.)

Along with these common types of freelance insurance, there are other types of business insurance policies you can consider as well. Some examples include hired and non-owned auto insurance, rideshare insurance, special event insurance, intellectual property insurance, and more.

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Insurance to Protect You

Now we have talked about various kinds of insurance to protect your business. But what about insurance for you as an individual?

If you were an employee, this is something you would typically get through your employer. But as a freelancer, you do not have an employer to go through for insurance. That means you need to purchase personal insurance policies yourself. Here are some important types of insurance to consider.

  • Medical: If there is just one type of insurance policy you buy for yourself, it should be health insurance. For one thing, it is vital for your wellbeing. For another, there is a penalty for not having health insurance. Since you cannot get health insurance through an employer, your best bet is probably to go through the ACA Health Insurance Marketplace to find an affordable plan. You might also check via the Freelancers Union, an organization that curates plans tailored to the needs of freelancers. There is no cost to sign up with this organization.
  • Dental: Some freelancers choose to purchase dental insurance as well. Dental insurance is notoriously expensive for something that you probably will not need to fall back on too often. But then again, dental care is also exorbitantly expensive. You will need to assess your personal risk to decide whether it is worth it or not.
  • Vision: Paying for vision insurance is kind of like paying for dental insurance; in many cases, it is not something you actually need all that often, so it may or may not be worth the monthly cost.
  • Life: If you have a family depending on you, you may be concerned about what will happen to them if you die. If you take out a life insurance policy, they can receive a payout if you do pass away.
  • Disability: What will you do if you abruptly become disabled, preventing you from working as usual? One solution is to apply for disability insurance. This type of insurance will help cover you if you are sick or injured, offsetting lost income. In this sense, it is a bit like the paid time off you would have through an employer.  Freelancers Union offers disability insurance.
  • Auto: Earlier we mentioned commercial auto policies for work vehicles. But for your own personal vehicle, you are going to need a regular auto insurance policy.

How Can You Save on Freelancer Insurance Costs?

If you want to keep your freelancer insurance costs low, try and purchase only the types of coverage you really need. Here are a few additional cost-saving ideas:

  • Amounts: Do not necessarily opt for the highest amounts of coverage, unless you have good reason to be concerned you will need them. Remember, there may be ways you can reduce your risk exposure beyond just purchasing hefty insurance policies. You can follow safe practices in the workplace to make injuries, accidents, and other expensive problems less likely.
  • Deductibles: Your deductible is the amount of money you have to pay out of pocket during the insurance policy’s term before the policy will start paying out. While raising your deductible is risky for you, it can help you lower your monthly insurance costs. As always, you will have to figure out what you personally are comfortable with.
  • Bundling: Insurance companies are hoping you will purchase more than one policy. That means they have good reason to incentivize the purchase of multiple policies. One way they do that is by offering discounts to customers who bundle multiple policies. So, if you are purchasing more than one policy, consider doing it all through a single company that will cut you a break for doing so.
  • Maintain a good track record: Freelancers who often need to fall back on their policies are posing a high risk to insurance companies. Those who rarely need to make a claim are less risky. If you can demonstrate through a clean record that you are one of those low-risk customers, insurance companies may be willing to give you discounts.
  • Other discounts: Some insurance companies may offer other types of discounts. They may list these opportunities online in some cases. In others, you might need to ask customer service directly.
  • Shop around: Equivalent policies may differ in price from one insurance company to another. That is why before you purchase freelancer insurance, you should request quotes from multiple carriers. Go with the one that is offering you the best value for your money.

Note that there are a variety of other factors that influence freelancer insurance costs. Some of these include your type of business, the geographical area where you are operating, and the size of your business. Naturally, you may not have a lot of control over these factors, which is why we chose to focus on those that you do.

Find Freelancer Insurance Now

You are now familiar with the different types of freelancer insurance coverage you need to protect both yourself and your business. If you are ready to find affordable coverage now, click any of the links below.

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