Even though you may not think of your freelance job as a business, it is one! And when you run a business, there are many things to think about. One thing you need to think about getting is business insurance.
Just as business insurance isn’t just for large corporations, insurance isn’t just about covering yourself if you have an unhappy client. Business insurance can cover a myriad of issues that might arise when running your freelance business.
Why You Need Business Insurance
Protect Your Assets
When you start a small business, as you have as a freelancer, you may have purchased equipment. If that equipment breaks or needs to be repaired, insurance may help you cover the costs to replace it. The insurance also covers theft and property damage in most cases.
Insure Your Place of Business
If your business is operated somewhere other than your home, you will need insurance to cover that property. This insurance would cover damage, theft, and potentially repairs required to get back up and running. If you sell physical products, your insurance may cover the replacement of those products.
If you cannot cover the costs out of pocket, it is essential to get your business operational again. Without it, your business may not be able to recover.
Clients May Require It or Can Potentially Sue
In some cases, clients may require that you carry business insurance. Some clients will be happy with just a Certificate of Insurance, and others may want specific things included in your policy before signing a contract with you.
It only takes one unhappy client to ruin a business without insurance. Business insurance can help you protect your business assets and possibly your personal assets as well. Having business insurance gives you some protection when being sued by a dissatisfied client.
What Kinds of Insurance You Might Need
General Liability Insurance
When you work for a client, you are not generally covered by the client’s insurance, even if you are working in their offices. You need to have liability insurance to protect you in case of damages. Some liability insurance also covers you in the claims of libel, slander, or copyright infringement.
There are several other types of liability insurance you might want to consider depending on the kind of work you are doing. One is called professional liability insurance, also called errors and omission insurance, in case you make a mistake while completing your work. Professional liability insurance is good for people like accountants or consultants.
If you are selling a physical product, you may want to consider product insurance. Product insurance will cover you in case of personal injury or property damage caused by your product.
Commercial Auto Insurance
If you have purchased vehicles to run your business, this is a must. Your personal auto insurance will generally not cover a business auto insurance claim. Not only would you be out of pocket for replacing the vehicle but also making repairs to the other car potentially damaged in the accident.
Using your personal vehicle for business purposes is possible, but check your auto insurance and see if you need to add coverage. Adding coverage may be as simple as adding a rider, but it will increase the cost of your personal car insurance.
Property Insurance
If you have office space outside your home, you will need property insurance. Property insurance will cover your losses in case of fire, damage, or theft. The building should have insurance to cover the building if you rent the office space, but it will generally not protect your business property.
Your homeowner’s insurance might not cover your home office, so you should check to make sure you don’t need to purchase additional coverage.
Cybersecurity Insurance
Nowadays, many freelancers work online, and much of their work is stored online. Cybersecurity insurance will cover you in case of a cybersecurity breach.
You may need this insurance if you store customers’ data, such as credit card numbers. Having this insurance can help you cover costs related to the breach, including notifying customers and monitoring their credit reports.
Business Interruption Insurance
Things happen that are sometimes out of your control, such as electricity outages or there are riots in your area, and you may need insurance to cover that if your business is not able to operate.
Business interruption insurance covers you in these cases and offers benefits such as recovering lost income, taxes, or lease payments. It does not cover natural disasters, so if you live in an area prone to things such as flooding, you should have a separate policy for that.
Personal Insurance
Don’t forget that you still need personal insurance that you might have been getting at a regular job. This may include health insurance, life insurance, and disability insurance. Depending on your personal situation, you may need to purchase these for yourself and your family.
How Much Is Business Insurance
All of this insurance will cost money, so you need to do your research and get several quotes based on your needs. You may be able to combine all your insurance needs into one package as well to get a better deal.
You also may not need all this insurance, so only purchase for what your business needs. Speak with an insurance agent as they can help advise you on what you need legally and what you feel you need in addition.
Also, check your existing policies to see if riders can be added to your current insurance to help cut costs.
Also, check your existing policies to see if riders can be added to your current insurance to help cut costs.
