Do Freelancers Need Insurance? What Is A Freelancer Insurance?

Freelancer Insurance

Do freelancers need insurance? Well, freelancing is a passionate choice, and though it brings the bonuses of being your boss, it also exposes you to several risks! So, freelancing is not only a passionate choice but a responsible one too! And thus arises the need for freelancer insurance!

When you are a freelancer, you are practically a business owner, and thus, if you make any error or hurt your employee or any third party, the lawsuits can flow in! And freelancer insurance is your best bet!

You can take the little stress of these errors, accidents, and lawsuits away from you for a small premium. And truly be the master of your universe!

Let’s see in detail why exactly you need insurance!


Why Do Freelancers Need Insurance?

#1: Your Personal Insurance Doesn’t Cover Your Business Issues

It is essential to know that your personal insurance will not protect you if something unfortunate occurs in your business!

For example, you are an interior designer, and a client comes to your home to discuss the design of her new office. But due to the slippery floor, she slips and breaks her angle!

If she asks for her medical expenses or files a lawsuit, your homeowner’s insurance will not protect you. You would need general liability insurance to help save your hard-earned money!


#2: You Need Protection From Property Loss

As a freelancer, you do not have access to employee insurance benefits, and you are on your own.

And, any loss of business equipment, say, a stolen camera if you are a photographer, can lead to huge losses. And your homeowner’s policy provides you only a limited limit of business equipment protection.

If your needs are not much, you can add an endorsement to your homeowner’s policy and increase your business equipment protection limits.

But if you have a lot of business equipment you need to safeguard, consider buying commercial property insurance.


#3: You Need Protection From Lawsuits

An erroneous work, a slip and fall, and other such incidents can lead to lawsuits and hefty legal fees, even if you are righteous.

Your personal insurance can still cover you for property loss to some extent, but it would not consider your professional lawsuits at all.

Thus, consider buying Professional Liability insurance, also called Errors and Omissions Insurance, and General Liability insurance to protect yourself from any lawsuit.


When Might Freelancers Need Insurance?

Sometimes, freelancer insurance is required by law too! Here are a few examples,


#1: Client Contracts

Many clients want or prefer freelancers that have general liability, professional liability, and other required policies to proceed with the project negotiations.

Especially more technical fields like architecture, web development, etc., mostly ask for an insurance policy. And when asked, you usually need to produce a certificate of liability insurance which is the ultimate proof of owning an insurance policy.

And the best part, once you buy an insurance policy, you are sorted for all the projects in the future. You have it for the year, and many clients would prefer you if you have one, giving you an upper hand!


#2: Loan & Lease Agreements

Most landlords would need a liability policy before they give you the lease of their property to your business. If any accident happens on the incident, you and the landlord both stay protected.

The same scenario is while taking a loan against your business. Again you would need to produce your insurance policy.


#3: Freelancer Marketplaces

Freelance platforms like Fiverr and Upwork usually need a general liability or other insurance types like health, workers’ compensation, disability, etc., by law!

What Are The Most Common Freelancer Insurance Policies?


#1: General Liability Insurance

The most basic liability policy that a freelancer must-have. It protects you from lawsuits arising from bodily injury or property damage caused by your work or that happened on your business premises.

Furthermore, it also protects you from advertising injuries like slander, libel, and copyright infringement.


#2: Professional Liability Insurance

Often we make a negligent error or deliver erroneous work, causing our client a financial or reputational loss.

This mistake, whether small or big, can lead to a lawsuit. And fighting a suit is not easy. But professional liability or E&O insurance helps you with the legal fees should you ever be caught in a case.

Also, you might not even be wrong to find yourself in a lawsuit. But the costs stay nevertheless! 


#3: Commercial Property Insurance

As explained above, your business equipment, machinery, and other business stuff like chairs, etc., can get damaged in a fire or stolen in a burglary.

Also read: 5 Ways to Save Money on Commercial Property Insurance?

So, even if you work from home, commercial property insurance is a good idea! And before you buy this policy, check how much coverage your homeowner’s or renter’s policy gives you. If it can be increased to meet your needs, stick to your existing policies.


#4: Business Owner’s Policy

A BOP combines a general liability policy with commercial property insurance. If you think you would need both, give BOP a shot. You can save some bucks in the premium by combining both in a BOP policy.


#5: Hired And Non-Owned Auto Insurance

If you use a personal or business vehicle for any business visits or other activities, you must have HNOA insurance.

It will save you from legal costs, medical care expenses, and property damage if you cause an accident when at work!

Other policies you can consider are cyber liability insurance and surety bonds, etc.


In A Nutshell…

Insurance policies, in my eyes, are an investment. They save you from unnecessary trouble that unforeseen events can bring.

Freelancer insurance policies are a good idea, even if you think you don’t need them.

But while you are purchasing insurance, one thing to keep in mind is moderation. You need not go overboard, or you end up spending too much and not staying underinsured either!

Strike a balance and soar high!

So, that was all about, do freelancers need insurance! I hope you got answers to all your queries. But if any of them still buzz you, drop all of them in the comments box! I will reply to all of them!

I am all ears and waiting!