Do Freelancers Need Insurance?

Melissa Zimmerman

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Do you need insurance as a freelancer?

You may not think you need freelance insurance, especially if you’re a service-based freelancer working from home. However, you may be surprised to learn that business insurance may be required in some cases, and in others, could be the ticket to winning new clients and scaling your freelance business.

Do Freelancers Need Insurance?

Currently, no state laws require you to carry commercial insurance for your freelancing business. The exception is worker’s compensation insurance, which is required by law in nearly every state if you hire employees.

However, carrying certain commercial insurance policies could help your business thrive.

Here’s how:

Insurance Requirements for Freelancer Marketplaces

Freelancing marketplaces such as Fiverr and Upwork are incredible resources for web designers, copywriters, graphic designers, and other service-based entrepreneurs to find new clients.

Billions of dollars are transferred to freelancers every year on these marketplaces, so ignoring them as a potential source of business can be a costly mistake.

Some freelance marketplaces require you to carry commercial insurance to bid on and accept jobs on their platform.

Fiverr, for example, requires freelancers to carry adequate general liability insurance to cover the most common risks of your service.

Upwork, on the other hand, does not currently have an insurance requirement outlined in its terms of service. However, they do require you to carry any insurance coverage required by law in your state and country.

If you want to tap into the enormous potential available in these freelance platforms, carrying the required insurance policies required by the platform or your state can help you find new clients.

Use Insurance to Grow Your Client Base

Not all freelancers get clients from freelancing platforms. If you have a “cold-call and connect” method for building your clientele list, you still may need to have insurance protection in place.

Many freelance service providers work directly for small, medium, or enterprise-level businesses.

What happens if your work results in a financial loss, lawsuit, or business interruption for your client?

Savvy business owners know that we live in a litigious society, and a potential lawsuit lurks around every corner. Many potential clients will require you to carry general liability, professional liability, or other commercial insurance policies to minimize their risks of being financially liable for your work.

Freelancer Insurance: a Competitive Advantage

Not every potential client or freelance marketplace will require you to carry insurance. However, you can still use your insurance coverage as a competitive advantage when bidding for jobs.

Having freelancer insurance in place protects your business, allows you to protect your clients, and makes you look like the experienced professional you are.

Use your coverage as a competitive advantage. Let potential clients know you have all the necessary business licenses, professional certifications, and insurance policies in place.

What Insurance Do Freelancers Need?

Now that you know that freelancer insurance may be required to find new clients, it’s time to consider what types of insurance you may need.

General Liability Insurance for Freelancers

Consider adding a general liability policy for the most basic business protection at a bare minimum.

General liability (GL) insurance is a foundational insurance policy that is designed to protect your business against claims for third-party bodily injury or property damage.

GL coverage will typically contain coverage against claims for copyright infringement, slander, and libel. This coverage is even more important for freelancers who provide services such as graphic design, web design, copywriting, and other marketing-related services.

Imagine that your client provides you with a competitor’s logo for inspiration. On the other hand, the competitor thinks your version of the logo is a little too close for comfort and files a lawsuit for copyright infringement. This real-life example happened in Utah when one gourmet cookie retailer sued its competitors for “confusingly similar” branding and packaging.

Don’t get caught up in your own version of the cookie-wars. Protect yourself with a general liability policy for freelancers.

BOP (Business Owner’s Policy) for Freelancers

Another common insurance policy that benefits freelancers is a business owner’s policy, known as a BOP.

A BOP is a combination policy that generally includes general liability insurance protection with commercial property coverage.

Why would you need commercial property insurance as a freelancer?

Commercial property insurance can protect your building or office and the equipment you use to run your business.

Many home-based business owners mistakenly believe that their homeowners insurance or renters insurance protects their business assets. However, these policies are designed to protect your personal assets, not your business equipment and property. Only commercial property insurance is intended to cover the laptops, desktops, cameras, video cameras, podcasting equipment, and other business assets you use while running your business.

The biggest reason to consider a BOP is the cost-savings potential. This combination policy is often more cost-effective than purchasing separate GL and commercial property policies.

Professional Liability Insurance for Freelancers

Also known as errors and omissions (E&O) coverage, professional liability is business insurance tailor-made with service providers in mind.

Professional liability is meant to protect you in the event your client experiences a financial loss resulting from your service or advice. Professional liability protects you against client lawsuits alleging professional errors, negligence, or omissions.

Cyber Liability Insurance for Freelancers

The tremendous technological advancements of our modern world allow you to run your freelancing business out of your home (or from the road). You can grab your laptop and work from just about every corner of the world these days.

However, public WiFi connections, stolen laptops, and criminal hackers are just a few of the ways that you could risk client data as you run your business remotely.

Cyber liability insurance is meant to protect you in case of a data breach, hack, or loss of sensitive personal information.

This business insurance policy can help ensure you don’t have to pay out of pocket for lawsuits, client notification, credit monitoring, or reputational damage if a break occurs.

Get Freelancer Insurance from Coverdash

Not sure which freelancer insurance policy is best for your business? Let the insurance professionals at Coverdash help you craft the perfect protection for your business.

Our insurance broker specializes in insurance for freelancers, and we’re able to get top-rated coverage for our clients at rates any freelancer could afford. Request a quote today and find out how affordable freelancer insurance can be from Coverdash.