Let’s debunk a few myths too many freelancers believe about liability insurance
As an independent contractor or a self-employed professional, you likely have a work service agreement that you use when working with your clients. An agreement that lays out what services you’re going to perform, payment terms and general things about deadlines, your responsibilities and theirs.
But as today’s business arena becomes more and more digital and complex, it is important to consider the possibility that even with an agreement in place, things can go wrong and clients can hold you responsible.
Whether you’re an IT, marketing or advertising consultant; things like lost data, copyright infringement, mistakes or unintended negligence can lead to costly problems. Here’s common misconceptions that many independent contractors believe and how to protect yourself and your livelihood against lawsuits.
Onsite freelancers don’t need insurance
As an IT consultant or freelance writer, you work at your client’s place of business and don’t even have your own office. So in your mind, you’re probably thinking you don’t need to have any kind of liability insurance. But the truth is, without insurance you’re liable for things that may happen while you’re working at a client’s place of business. Imagine if you accidently spill coffee on a client’s laptop and it’s completely fried or someone trips over your briefcase and gets injured, etc. You can be held responsible and sued. And without insurance, you’ll be liable to pay even though it was not intentional.
Unexpected events are no one’s fault
While most professionals are not going to purposely lose a client’s data or cause their business to come to a standstill because of technical difficulties, these things do happen. And even though the disaster was unintentional and you may have a service agreement that states you’re not responsible, your customer can still try to sue you. If you have Errors & Omissions coverage, your policy will protect you and cover costs for the lawsuit including attorney and court fees.
Insurance is expensive and often goes unused
Many people believe this myth about all kinds of insurance. And while it is better to have insurance and never need to use it, having it is not only a smart idea, it can mean the difference of you getting out of a lawsuit with your business in tact.
Think about how much it will cost you if a client sues you and wins. The amount of money you’d be expected to pay could be astronomical, even if you just consider the fees for a lawyer and the trial. And even if the client agrees to settle out of court, can you afford to pay them what they want?
Monthly premiums for insurance are much more manageable and realistic, and they give you the peace of mind that you’re covered in the event that something does go wrong.
Freedom and autonomy have their cost
As a consultant or freelancer, you enjoy the freedom and autonomy that goes along with being self-employed. But it’s important to understand your risks when doing business, especially if your work is centered around technology, data and has an impact on your client’s core business.
Protect yourself by getting a policy that will cover you in all your business dealings. We offer an array of insurance solutions that are designed with your needs in mind including professional liability and errors and omissions insurance. Give us a call and we’d be happy to review what policies would work best for you.