Freelancers enjoy freedom and flexibility, but don't have an employer to protect them from a lawsuit. They also might have fewer assets to draw upon during an emergency. Business insurance gives you peace of mind and helps pay for costly legal fees, property repairs, and medical expenses.
These insurance policies cover common risks faced by freelancers.
General liability insurance covers the cost of third-party accidents, such as a client who trips and suffers a bodily injury at a freelancer's home office. It may be required for a commercial lease.
This freelance liability insurance covers legal costs when your mistake or oversight negatively affects a client. It's sometimes referred to as errors and omissions insurance (E&O).
Cyber insurance helps freelancers recover financially from data breaches and cyberattacks. It's strongly recommended for any small business that stores personal information.
Workers’ comp shields freelancers from work-related medical bills that personal health coverage might deny. Most states require it for businesses with employees.
A BOP bundles general liability coverage and commercial property insurance at a discount. It protects against the most common lawsuits and business property damage.
E&O insurance protects full-time and part-time freelancers from financial losses related to mistakes and oversights. It's sometimes referred to as professional liability insurance.
This policy covers costs if a freelancer's business property is stolen, lost, or damaged. Bundle it with general liability coverage in a BOP for a discount.
This policy covers costs when a freelancer's business vehicle is involved in an accident. Each state has its own requirements for auto liability insurance.
Fidelity bonds provide reimbursement for a client if one of your employees steals from them, including theft by electronic funds transfer. They're sometimes required by client contracts.
Freelancers often qualify for discounts on business insurance. Factors that affect your premium include your profession, business location, and the policy's limits and deductible.
Here are the average costs for top policies sold by Insureon:
General liability insurance: $42 per month
Professional liability: $61 per month
Workers' comp: $45 per month
There are several important reasons for freelancers, independent contractors, sole proprietors, and other self-employed individuals to carry insurance:
You may need insurance coverage for contracts, loans, and leases. Clients, lenders, and landlords may require you to carry insurance to protect themselves against potential losses. In some cases, they may ask you to list them as an additional insured on your policy.
Some freelancer platforms require insurance. Marketplaces like Fiverr and Upwork sometimes require freelancer insurance before you can list your services. On Fiverr, you need sufficient general liability insurance to cover the most common risks for the type of service you offer. Upwork states that you need to "obtain any liability, health, workers' compensation, disability, unemployment, or other insurance needed, desired, or required by law."
You may need insurance to comply with the law. Depending on the laws in your state, you may need coverage for a business-owned vehicle, to obtain a license in your field, or to protect against work-related injuries.
You gain client trust by being insured. Even when it's not required, a certificate of insurance proves that your business can handle the cost of a lawsuit or accident. This helps attract clients and can give freelancers an edge over their competitors.
Insurance protects your business from catastrophic losses. Business insurance covers out-of-pocket costs from customer accidents, fires, and other incidents. Keep in mind that homeowner’s insurance and personal health insurance might not cover business-related claims.
With Insureon, you can get usually get a certificate of insurance on the same day that you apply for quotes. It’s a simple three-step process:
A certificate of insurance will outline all your coverage options, such as policy limits, deductibles, and any endorsements. It serves as proof of insurance for clients, landlords, lenders, and anyone else who asks whether your business is insured.
Yes, the type of freelance work you do affects which insurance policies you need.
For example, the law in several states requires workers' comp coverage for construction contractors, even if they work alone, due to the high risk of injury. In some states, real estate agents and brokers are required to carry errors and omissions insurance. Plumbers and electricians may need a general liability insurance policy to obtain a license.
Your insurance should always match the risks of your profession. For example, freelance computer technicians and other tech professionals should invest in tech E&O to protect against specific cyber risks. A freelance writer might need media liability insurance to cover claims of libel or plagiarism.
Additionally, freelance makeup artists, freelance videographers, and other freelancers who travel with business products or equipment should consider inland marine insurance, which protects your business property wherever you take it.
You may need to do a little research to find out which type of coverage your business needs, or simply ask a licensed insurance agent.
Insurance is usually affordable for freelancers and small businesses in low-risk industries. There are a few ways to find cheaper insurance:
Bundle policies. Many small business owners buy general liability coverage and commercial property insurance together in a business owner's policy, which costs less than purchasing each policy separately. It's sometimes possible to bundle other insurance options as well, depending on your profession.
Shop around. Compare quotes from different insurance providers to make sure you're not paying too much for insurance. Insureon provides an easy way to achieve this with our free online application.
Choose the right policy limits and payment plan. You can customize your insurance policy to save money, such as by choosing a higher deductible or lower policy limits. Pay the full annual premium if you can, as it often costs less than the monthly premiums.
Avoid claims. Finally, take steps to reduce your business's risks. Clear communication with clients can help you avoid lawsuits, which helps keep your premiums low.