Along with the satisfaction of being self-employed, freelancing comes with many freedoms. You provide a specific set of services as an independent contractor to one or more clients and except the specifications contained in your agreement with the client for the project you’re handling, you won’t freelancers often have less to worry about when it comes to obligations related to the job. They get to choose their own work schedules and decide who to work with and who not. For those who are not so much comfortable with too much protocol and workplace bureaucracy, freelancing can be an exciting alternative for you, not to mention that depending on your profession or the kind of services you provide, working remotely or from home could also be an option.
Despite the many advantages, however, freelancing also comes with its fair share of risks involved. Depending on your field of specialization as a freelancer, your business or practice may face several obligations, risks, or liabilities. As a wise independent contractor, getting freelancer insurance can be a great move for you and your business protected. But how, and why; some may wonder! Well, here are some reasons why freelancers should consider getting insured, whether you’re already operating or you’re just getting started.
As long as you’re a professional service provider, the fact that you’re a freelancer doesn’t absolve you from responsibility and exercising the duty of care. If anything goes wrong during or after you provide your services, your client reserves the right to demand compensation or even sue for damages suffered as a result of your incompetence, errors, omissions, negligence, and so forth. More important to note, is that some of these claims may be overly expensive depending on the nature of the claim and damages in question. To protect yourself from expensive claims that may ruin your reputation, eat into your profits, and potentially bring your business to its knees, some types of insurance coverage you may want to consider getting include:
While project completion will be your main goal and responsibility, your client will also expect everything to be done right. In other words, you’re accountable if anything goes wrong. In some cases, however, things may go wrong and some damages are suffered by your client. For instance, you’re a freelance appliance repairman and when you head to a client’s home, one of the family members trips over your set of tools and sustains what could be a life-threatening injury. In case such a person decides to sue you for damages, pain, and suffering, general liability insurance will cover the costs of the resulting lawsuit, treatment costs, and other expenses related to such injuries.
In the worst-case scenario, such an accident results in death, the beneficiaries or kin of the deceased individual may sue you for wrongful death. Wapner Newman’s Philadelphia wrongful death lawyer asserts that in a wrongful death case, the bereaved or beneficiaries of the deceased could be eligible for compensation for various damages. These may include related medical expenses, projected lost income, funeral expenses, and projected future financial obligations (e.g. mortgage and tuition), among others, which should be paid by the at-fault/negligent individual or their insurance. In a nutshell, general liability insurance can protect you and your business in many ways.
Also known as professional indemnity insurance, professional liability insurance is also available for freelance independent contractors. It’s also commonly referred to as Errors & Omissions (E&O) and can offer protection in the event that claims are made against professional advice or service rendered. For instance, you’re an HVAC repairman and after fixing a heating unit for your client, it ends up failing or the client is unhappy with how it’s functioning upon completion of your project. Maybe you replaced a damaged part with the wrong match or you simply forgot to replace the air filter and now the unit won’t function properly. This is why it’s called errors and omissions, and you shouldn’t have to pay for a replacement of the entire machinery just because of a slight error. As long as your premiums are up-to-date, professional liability can sort you out in such a case and similar issues that general liability insurance may not cover.
Unless you strictly work from your home office, you’ll, at least occasionally, need to visit job sites or client’s homes as a freelancer. You most likely have one, but as you build your independent contractor business, it will reach a point where you get a car to make it easier to maneuver around. This is where commercial auto insurance comes in. It covers you in a case when driving, you get into an accident and cause damage to people or property.
It’s a powerful feeling to know that you’re protected in case something goes wrong. It allows you to focus less on the risks you face and more on giving your best to your clients. Most of your energy goes to deliver your best work and expanding your business. In other words, it improves productivity, and needless to mention, this is what happens when you have insurance as a freelancer. As if that’s all, having insurance sends a message to potential clients that you’re professional, reputable, more responsible, thus giving you an edge over your competition in the industry. Besides helping increase productivity, it could also help open doors to new opportunities in business.
Well, if you’re a freelancer who works from home, having personal home insurance will only protect your home and related possessions, but not the equipment used in your freelance business. Think of cameras, laptops, tools, and other valuable equipment. When these get damaged, broken, or stolen, the aftereffects could be catastrophic in case you don’t have enough cash at hand to have them fixed or replaced. With adequate commercial property insurance, you can have such property or equipment replaced without denting your wallet or experiencing delays and inconveniences.
Being a freelancer is also a huge undertaking, despite the numerous freedoms it comes with. In the event that something unfortunate happens and you out of the job for a considerable amount of time, it can put a huge toll on your income. The best way to protect your business (and yourself) is to identify your needs and find out the best freelancer insurance out there for you. The above are just a few of the various reasons why you should go ahead and get insured as a freelancer.
Written by Stan Roach.