A freelancer is a person who is self-employed and offers services to one or more clients. As an independent contractor, you don’t have to take on any jobs you don’t want to and you’re not obligated to your clients beyond the project you’re currently busy handling. Many people are drawn to freelancing for the freedom it seems to offer. Being a freelancer allows you to choose your own work schedule and decide who to work with; no more clocking in or out, or listening to coworkers' stories if that's just not your thing, or you prefer working on your own, on a variety of different types of projects.
In fact, by the end of 2016, more than 35% of the
American workforce, or 55 million people, were freelancers in a wide range of different industries and professions. As a successful freelancer, you have the opportunity to bring in greater profits, but on the flip side, you’re also the final address when problems arise. Running your own business comes with plenty of achievements, but every business also has its own risks.
Here we’ll take a look at freelance insurance and what you need to do to protect your business before you get started.
The Best Insurance for Freelancers
The term “freelancer” describes your work setup, rather than the type of work you do. Freelancers can range from personal trainers working out of a number of gyms to construction workers, beauty professionals and more, and the type of insurance you need will depend on the work you do. Your business is an asset and just like you would insure an expensive item, you need freelance insurance for your business. Let’s have a look at four ways
freelance contractor insurance can help you:
1. Focus on Growing Your Business
With the right freelance business insurance, you can stop worrying about risks of what could happen if something goes wrong, and instead invest your energy focused on doing your best work. Insurance can also help you gain an edge over the competition in your industry. Clients often look for businesses with insurance as it shows them you’re serious, responsible and forward-thinking. Some businesses may only work with freelancers who hold insurance, so being insured may open doors to new job opportunities.
2. Be Safe in Case of Claims
There are a few different types of insurance that can offer you help in case of a claim. The main ones relevant for freelancers include:
- General Liability Insurance - As a freelancer, you’ll be responsible for completing a project for your client. But, just as you’re responsible for everything that goes right in the project, you’ll also be held responsible if anything goes wrong. This is where general liability insurance will protect you. For example, if you’re a carpenter with your equipment set out in a client’s home and the client trips on a toolbox and gets injured, your freelance liability insurance will cover any resulting lawsuits and in some cases, even medical expenses. If a delivery person is dropping off business-related items at your office and they hurt themselves, you'll be covered. If you’re visiting a client in their home or office and you knock over and smash an expensive vase or spill water over a computer, your liability insurance will cover it. Freelance public liability insurance is similar, but protects you specifically if a third-party or member of the public gets injured on your property or due to your negligence.
- Professional Liability Insurance - Professional liability insurance or freelance professional indemnity insurance (also known as Errors & Omissions) will protect you in the event of claims against your professional services or advice. This sort of insurance is especially important for freelancers who work directly with clients while providing a service. For example, as an HVAC technician, this insurance may protect you if the machinery fails after you've completed your fix. If you’re a photographer, it may cover you if your client isn’t happy with the results of a photo shoot. This is a specific type of insurance and may not be covered under general liability insurance.
- Commercial Auto Insurance - As a freelancer, you’ll probably need to visit clients or job sites, at least occasionally. Auto insurance will make sure you’re covered for any damage you cause to people or property while you’re driving.
3. Protect Your Property/Equipment
Property insurance will protect your business property and equipment. While you may have personal insurance policies covering your home and contents, this may not extend to the equipment you use for your business. This could include a laptop, a camera, tools, and more. Depending on the type of work you do, your equipment could be very valuable and you will want to be sure it's covered.
4. Protect Yourself
As a freelancer, you run your own business which means that if anything happens to you that lays you off work for an extended period of time, your income will take a serious hit. Disability insurance will provide you with regular payments if you can’t work due to illness, injury, or other reasons. When you don't have an employer, you need to think through all these types of coverage for yourself, to make sure that being a freelancer benefits you and anyone who depends on you.
Choosing Your Coverage - Tips
Now that you’ve seen how important freelance insurance is for your business, you need to find the best coverage to suit your needs. This will vary depending on the industry and profession you work in so there’s no one-size-fits-all approach. Understand the specific risks to you and decide which type of insurance will best protect you. You then need to choose an insurance provider based on the coverage they offer, the cost, your location, customer support, and more. Next Insurance offers tailored plans for a wide range of classes of business, allowing you to choose the coverage that works for you. With the right freelance insurance in place, you’ll be able to focus on your business with confidence.
