A self-employed person works for themselves and not an employer who pays them a consistent salary.


What does it mean to be self-employed?

Being self-employed means you work for yourself rather than being employed by someone else and receiving a consistent salary or wage. Self-employed individuals often operate as independent contractors, sole proprietors, freelancers, or business owners who earn an income by contracting directly with businesses or offering their services to clients.

Self-employed individuals have the flexibility to set their own schedules and decide who they work with. Depending on where they operate, they may also have unique tax-filing requirements and responsibilities.

Self-employed vs. independent contractor: What’s the difference?

Although there are many similarities and overlaps, these two terms are not used interchangeably due to differences in laws between states, differences between industries and even an individual’s own mindset. Think of it like this: All independent contractors are self-employed, but not all self-employed individuals are independent contractors.

Generally speaking:

  • Self-employed: A broad category of individuals who operate their own businesses or work independently.
  • Independent contractors: A subset of self-employed individuals hired by another entity to perform specific tasks, projects or services under a contract but aren’t considered employees.

Types of insurance coverage for self-employed individuals

Self-employed individuals often wear multiple hats, and comprehensive insurance coverage is a cornerstone of their financial security. Here are some of the essential insurance coverages for self-employed workers:

Navigate self-employment with NEXT

At NEXT, we’re 100% dedicated to small businesses. With 24/7 access to your plans and policies, you’ll be prepared for whatever comes your way. Just apply online and follow the prompts to access your custom instant quote in under 10 minutes.

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Let’s find the coverage you need for your business
Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.