A Guide To Business Liability Insurance For Freelancers

Working as a freelancer has lots of advantages; you can be your own boss, set your own hours, choose what clients to work with, and have the freedom to work from wherever you please. However, there are a few disadvantages to this career choice that can’t be overlooked and one of the main issues for freelancers is the lack of insurance that comes with being a sole proprietor.

When you work for an employer, the usual package perks include health insurance, pension, and holiday pay. As an employee, you’re also covered under the company’s liability insurance. However, as a freelancer, these are things that you have to investigate and acquire (and pay for) yourself. And it’s extremely important that you do so, especially in the case of a potential liability threat — which is basically every single client when you’re a freelancer.

Being solely responsible for your own work is great 90% of the time, but it’s not so great when something goes wrong. Regardless of whether you’re in the right, a claim that never makes it to court can still cost you up to $5000 in legal fees. So it’s worth getting covered. Luckily, by signing up for the right insurance policies, you can protect yourself and your business in the long-term.

Types Of Liability Insurance

When you freelance on a project, you’re responsible for that project from beginning to end. This means that if anything goes wrong, you could potentially be held accountable in court (yikes!). Liability insurance provides the safety net you need to cover your lovely derrière if you ever find yourself in this situation. Basically, whenever anyone screams “LAWSUIT’ in your direction, your liability insurance will come into play. But, of course, it’s not really that simple. There are a few different types of liability insurance and it’s up to you to assess which you need to invest in, and which you can do without.

Here are three of the most common types of liability insurance:

1. Indemnity Insurance

This insurance covers you as a freelance worker and limits your liability exposure whilst working on a project. If a client is unhappy with your work, they must prove that you didn’t fulfil your contractual obligations before seeking compensation. If this can be proven and you can’t mediate a satisfactory resolution with your client, you’re going to need indemnity insurance in place — especially if you find yourself in court! Many larger companies won’t actually work with a freelancer who doesn’t have this insurance in place to begin with.

2. General Business Liability

Also known as ‘slip and fall’ insurance, this is more geared towards freelancers who meet with clients on a regular basis and/or operate from an open office. It protects you if one of your clients gets injured on your premises or because you were negligent in some way. Although it’s easy to dismiss this insurance if you work alone from home, it’s worth sitting down to think about. Are you sure that there’s no possible way for your clients to get injured whilst working with you?

3. Business Owners Policy

This is a combo package that covers both business property insurance and general liability insurance. This will cover all of your freelance equipment such as computers, laptops, printers, and cameras, so it’s pretty essential for any freelancer who uses specialist equipment.

More importantly, business property insurance can also includes cyber liability insurance, which will cover you for loss of digital data.

This is pretty important when you’re a digital-based freelancer, as a missing memory card can create havoc if it contains all of your work. Although, this is less likely to happen if you’re using an online system like Buckets to manage your client projects. If you do lose important digital data, you could also lose the contract, and the client could sue you for not adequately protecting their information.

Choosing The Right Policy

One of the best ways to find a good insurance policy is to simply ask around. Which providers are your freelance colleagues using? What are they like to deal with? Are there any hidden clauses in the contract that you need to be aware of? Alternatively, you can deal with a broker or get a personalized quote directly from a few insurance companies to assess which best suits your needs.

Thanks For Reading!

Buckets helps to supercharge collaboration and organization needs across the world. If you

enjoyed reading this post, please let us know by clicking on the ❤ below!

To sign up for Buckets, just click here.

For regular updates from the Buckets team, you can also catch us on Twitter @bucketsdotco.