What is business insurance?
- A way to protect you and your assets.
- A safeguard in case something bad happens with a client.
- Admitting you’re not invincible.
Do freelancers need business insurance?Any freelancer who is serious about their work should consider business insurance. No matter how small or casual your gigs are, if you’re receiving compensation (which, hopefully you are), you’re technically a small business. And with that comes risk.
Business insurance is designed to help protect you from risks.
Whether you’re a designer, marketing expert, programmer or photographer, you’ll often be required to have insurance to land bigger gigs.
How it works
You pay a small monthly amount in exchange for protection from an insurance company in case something happens.
Most people wear seat belts even though they probably won’t get in an accident that day – and because you never know what will happen the one time you don’t wear it. The same is true with insurance.
A lot of freelancers might think they’re not a big enough operation to need business insurance, but regardless of the size of your business operation, you still have a lot to lose.
Freelancer claims examples
- You spill coffee on your laptop right before a deadline.
- You forget to backup your computer right before an unexpected computer crash.
- Hackers find a way into your stored data.
- A disgruntled client threatens you with expensive lawsuits.
Will my homeowners policy cover me if I work from home?
Most homeowners or renters policies won’t cover your freelancing activities. Of course, all policies are different, so you should check to see if business activity is covered on your policy.
At most, a homeowners/renters policy will probably only cover around $500 worth of business property.
There are many other risks that freelancers face besides the loss of property or equipment, so check out our guide to insurance when you work from home.
Will business insurance cover the people I work with?
Coverage will pertain to you and any employees that work for your business. If you need to cover a client or partner, you can add them to your policy as an “additional insured.”
Cool insurance fact: You can assign coverage to a specific event or project. It’s perfect for freelancing gigs.
Is it normal for clients to ask me to add them as additional insureds on my policy?
Yes, that is totally normal. Clients commonly ask freelancers to list them as additional insureds before signing a contract. That way, they can be sure they’re protected from risks associated with doing business together.
Common freelancer insurance requirements
- Professional liability insurance (E&O): Protects you from professional errors or omissions as a result of your advice, services or expertise. Think of it as malpractice insurance for whatever kind of work you do.
- General liability insurance: Protects you from third-party lawsuits involving damage to someone else’s property (i.e., your client’s equipment) and bodily injury (i.e., slips and falls at your home, office or wherever you run your business). This is especially important for event planners, photographers and filmmakers.
- Business owner’s policy: Combines business property insurance and general liability insurance into one nifty package that saves you some dough.
- Cyber liability insurance: This protects you from the (very expensive) cost of a cyber attack. Hackers think it’s easier to go after freelancers because they assume there will be fewer security procedures in place.
- Workers’ compensation: This protects your employees (and your pocket). Your clients might also request that you cover yourself. It’s especially important if you do physical work, like photography or event planning.
- Business auto insurance and/or Hired & non-owned auto insurance: Business auto covers vehicles owned by your company. Hired & non-owned covers vehicles rented or borrowed, as well as vehicles used by your employees for work.
- Business property insurance: This policy helps cover the things you need to perform. This pertains to equipment at your business premises and up to 500 feet outside of that area.
- Inland marine insurance: If you take your work gear outside of your business premises, this coverage protects your equipment on the go.
General liability insurance also protects you from lawsuits involving copyright infringement, false advertising, slander, libel and copyright infringement. This is critical if you work in marketing, design or writing.
Note: Personal auto insurance typically doesn’t cover work errands or visits to clients. Look at your policy carefully to see if it does or not.
How much is business insurance for freelancers?
Probably not as much as you think. The price of business insurance depends on how much risk you face – and insurance companies consider many freelancers to be “low-risk” businesses.
The cost will depend on things like your profession, the size of your operation, and what kind of things you want to protect.
That’s why a freelancer may pay around $500 a year, while a large business could pay $500,000 a year.
Get a quote with us and we’ll help you find affordable business insurance – it’s what we do.