6 types of commercial insurance every freelancer should consider
If you are a freelancer, it’s easy to think you don’t need commercial insurance. After all, you are a small business and work for yourself. You might not even have any employees. Is it necessary? The answer might be … yes.
Here are just some of the scenarios that make purchasing commercial insurance a good idea:
• A client is injured while on your property
• A client’s computer is damaged during a meeting
• There is a dispute over a contract between you and a client
• Your computer breaks down, causing you to miss deadlines
• Your office equipment (i.e. computer or printer) is damaged or stolen and needs to be replaced
• A natural disaster disrupts your ability to work
• A client blames your work for the loss of another client
• A third party claims you copied an idea, image, tagline or trademarked language, name, or logo
• The client believes your professional advice created a problem or legal difficulties
Now that you know some of the circumstances that might arise in your freelance business, here is a review of 6 kinds of commercial insurance that you should consider purchasing.
1. Indemnity insurance (“Error and Omissions Insurance”)
“This kind of insurance is also called professional liability insurance or professional indemnity insurance and protects you against being sued by clients claiming that your writing or the product you made was somehow negligent due to an error or accidental omission,” according to The Balance.
Have you ever considered what might happen if a client ever sued you? You could end up paying damages in civil court. Indemnity insurance will cover you and set a limit to your liability. Indemnity (professional liability) insurance is important for almost any freelancer, consultant, or independent contractor.
2. Liability insurance
This type of policy is sometimes called “slip and fall” insurance. What if a client comes to your house and trips on the front steps? If anything were to happen that resulted in an injury, hospitalization, or loss of income, you could end up paying a lot of money in damages and/or medical bills. If clients ever visit you, either in an office or at your home – or if you ever work with subcontractors – it’s a good idea to think about purchasing liability insurance.
3. Homeowners insurance
Many freelancers work at home, and if so, you should check the coverage included in your homeowner’s policy. “You need to make sure that your home insurance also covers your home office and the items inside it…What if your insurance requires a rider or a separate policy? You would not want to find that out as you’re recovering from a tragic event,” according to The Balance.
4. Content insurance
This type of insurance is specifically to cover items in your home office, including computers, printers, furniture, and the like. Sometimes these items might be covered under your homeowner’s policy or with a rider, but make sure, as replacing them could be costly.
5. Business interruption insurance
As many across the country came to realize last year, natural disasters can disrupt everything in your life, including your business. Hurricanes, floods, tornados, wildfires, and earthquakes can cause damage to property or loss of electricity and water. You might have to relocate. This could mean you would be unable to work for a period of time, maybe days or even weeks. Business interruption insurance can protect you under these circumstances.
6. Health and disability insurance
The Affordable Care Act essentially mandates that everyone must have health insurance or incur a tax penalty, whether it’s provided through your spouse’s policy, an employer, or you buy an individual policy. This includes freelancers. If you plan to purchase an individual policy, you’ll need to do your homework. Another option is to purchase COBRA insurance. You must also be aware of when you can sign up for a new health plan or change health plans.
Here are resources where freelancers can find health insurance coverage:
National Association of Health Underwriters
National Association for the Self-Employed
Disability insurance is not required, however, it is something you should think about purchasing, especially if you or your family depends on your freelance income. Disability insurance, “…ensures that you’ll continue to have an income if you were hurt or injured and couldn’t write,” according to The Balance.
Even freelancers must have the right commercial insurance protection. If you have questions about which commercial insurance might be right for your needs, contact Avante Insurance today.