Freelancing brings many rewards, but also poses unique risks. Without an employer to rely on for financial security, freelancers must carefully consider and mitigate potential dangers to ensure financial security.
One way of doing this is through purchasing business insurance. Read on to gain more insight into the best coverage options for freelancers such as professional liability and business interruption policies.
1. General Liability
General liability insurance is an essential tool for freelancers. Without employees or an employer-provided safety net to fall back on, freelancers need a business policy to cover damages that might occur as a result of working for clients – particularly if working on site or at their homes. Also consider property coverage to protect investments like laptops and videography setups when carrying them between jobs.
Based on your work and clientele, additional forms of insurance may also be necessary to safeguard you against specific risks in your industry. For instance, freelance computer technicians might require tech E&O coverage for hacks and data breaches while freelance writers should seek media liability protection against accusations of libel or plagiarism. You can purchase these policies through either standalone policies or customized business owner policies that combine general property coverage along with interruption coverage in one package.
Consider purchasing a blanket endorsement that allows you to add multiple entities as “additional insureds” without needing to make changes every time – this will save money and time by covering everything under one policy.
2. Business Owner’s Policy (BOP)
Business Owners Policies (BOPs) provide cost-effective bundles of coverage combining general liability insurance, commercial property insurance and business interruption insurance into an affordable package. Many providers also offer specific industry or profession coverages; graphic designers or plumbers for example might need business equipment insurance to protect expensive tools from damage or theft.
BOPs can simplify the claims experience for multiple types of insurance by providing one point of contact and an efficient process, making this solution especially advantageous for freelancers who must carry professional liability or workers’ compensation coverage under contracts with clients.
For instance, if your freelance work includes working with members of the public, it would be wise to obtain a business owners insurance plan with public liability cover – this pays out in case your negligence causes injury or property damage to someone else.
Cyber liability coverage provides protection from the financial costs associated with data breaches, making it essential for freelancers who work with client data or digital content. Coverage includes notifying impacted clients, credit monitoring services and any ransom payments made due to data breach incidents. You should also consider purchasing an intellectual property policy to safeguard trademarks, patents and copyrighted material.
3. Professional Liability
As a freelancer, you may not know all of the policies and coverage options that can protect your business. But having proper insurance can help mitigate risks and relieve financial pressure caused by accidents, lawsuits and unexpected situations; meet contractual requirements from clients or landlords while giving peace of mind to yourself and others.
Most freelancers must purchase at least general and professional liability insurance policies to protect themselves against third-party risks, like clients slipping and falling in your home office or contractors making costly errors on jobs. Professional liability, or errors and omissions (E&O), insurance can cover legal expenses when your mistake negatively affects a client’s bottom line.
Commercial property policies provide costs coverage in the event that equipment is stolen or damaged while working from home, as homeowners and renters policies usually only offer limited protection for business-related damages. Most freelancers will need workers’ compensation insurance which helps cover work-related medical bills denied by health insurance, auto insurance for any vehicles used during work travel and cyber insurance which provides financial protection from data breaches and cyberattacks – you can often bundle them together and save!
4. Business Interruption
Business interruption insurance can protect the income of your freelance business if an unexpected disaster prevents it from operating for an extended period, including lost revenues as well as ongoing expenses like rent and utilities until your operations can resume. Though not required by law, freelancers often find this type of coverage worthwhile.
This coverage typically comes as part of your property insurance or as a customizable Business Owner’s Policy bundle; however, you may also purchase a stand-alone business interruption policy as this type of protection can be invaluable to any small business that relies heavily on suppliers or customers for revenue.
As soon as direct physical loss or damage to your property interferes with its ability to conduct business, this form of coverage typically kicks in. This could include damage from natural events like hurricanes and fires as well as events related to COVID-19 such as civil unrest. It could even cover lost income if your business closes due to government order (often known as civil authority) or you cannot reach it because of natural disaster (ingress and egress). When reviewing this type of policy be wary of any limitations placed on this coverage!
