The Most Interesting Types of Freelancing Insurance

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As someone running their own business, insurance is definitely something you should consider. Whether you want to protect your equipment, your work itself, or against any potential injuries, there are tons of freelance and self-employed insurance options out there. However, what do they all mean, and do you actually need them?

To help you answer these questions, we’ve put together a list featuring several different types of freelance insurance options and what each of them entails.

First things first though, do you actually need insurance?

Do I need insurance as a freelancer?

Consider this – you’ve taken on a big-time project worth tens of thousands of dollars. You’re all set to finish up soon but you’re faced with sudden equipment failure which leads to a failed project. The unhappy client then decides to sue you for the entire cost! Now what?

There will likely be a legal case, even though it wasn’t your fault. And you’ll have to pay tens– or hundreds– of thousands of dollars in fees and damages. This is where having insurance comes in handy.

When it comes down to it, insurance is something that you need to consider depending on where your freelance business currently stands. Smaller-scale freelancers that do not actually deal with big-time projects cannot really justify the cost of insurance.

But if you’re a freelancer who works on big projects, having insurance might just be in your best interests.

Apart from public liability insurance, you also have to consider plans for health and home insurance or professional indemnity insurance.

What insurance do freelancers and self-employed need?

Insurances for freelancers - professional liability, property, health and life insurance

1. Professional liability insurance 

Professional Liability Insurance or Professional Indemnity Insurance or otherwise also called Errors and Omissions (E&O) Insurance is one of the most common types of insurance used by freelance professionals.

It protects you against clients suing on the basis of product negligence due to an accidental omission, an error or even slander. Some big businesses actually require that you have this type of insurance before agreeing to work with you.

Keep in mind though that for freelancers with small or medium sized businesses, this type of insurance is not really necessary since it does seem to cost a bit. As your business starts to grow though, you should definitely consider getting the freelance Professional Indemnity Insurance for yourself.

Please note that if you have employees working for you in your freelance business, they also need to be included in the professional liability insurance!

2. General liability insurance 

The second type of freelance liability insurance we’re looking at covers injuries occurring on your premises (your office) or if someone is injured because of your business (you bring work on the client’s office).

But do freelancers really need liability insurance? If a client comes over and gets bitten by your dog, falls on the toilet floor, or something similar to that, liability insurance will generally cover it.

Just like professional liability insurance, some clients may require you to have public liability insurance before agreeing to work with you.

However, if you work from your home and don’t usually invite clients over, the risk of injuring someone at your work premises is probably not high enough to justify the expense.

3. Home and Contents insurance 

In case you are working from a home office, you might want to look into home insurance and check whether they cover your office and equipment. Sometimes they do, but sometimes they don’t.

Most of the time they cover anything, apart from more professional items like photography equipment. If the latter is the case, a contents insurance might be a good way to protect your property.

If your work equipment will cost a rather hefty sum to replace in case of a fire or a robbery, this type of insurance will cover it. It really depends on the tech you have – a 1,000 dollar laptop alone probably doesn’t justify contents insurance.

4. Health insurance 

These types of insurance are probably more familiar to you. As a freelancer or self-employed, your health insurance will not be as affordable as that of regular employees. The exact amount however, depends on each individual.

In any case, you might want to consider joining a group for health insurance, like the Freelancer Union (US) or The Editorial Freelancers Organization, for example. Joining such a “guild” will help you get health insurance at a price you can afford.

Freelancers in the US have a couple of options when it comes to health insurance

  • Affordable Care Act – ACA or Obamacare is a great option for freelancers looking for affordable health insurance. Keep in mind though, the recent changes in ACA policy no longer makes it a requirement. This could affect pricing and premiums in the long run.
     
  • Cobra Coverage – If you’re just starting out and are looking to become a freelancer, check with your insurance provider first as most insurance plans offer the option to convert your existing group plan into an individual plan.
     
  • The Freelancers Union – The Freelancers Union offers a health insurance plan for freelancers. Head over to their website to learn more about choosing the right plan tailored to your needs.
     
  • Spouse Insurance Plan – If your spouse works and has coverage through their employer, this may be a good option. Because it’s an employer-based plan, it may also save you money, because it may charge a lower premium for dependents.

Freelancers in Germany have two different kinds of health insurance available: public (statutory) and private.

If you are a freelancer staying temporarily in Germany, we would recommend you get yourself private health insurance as getting into the public insurance group is not generally easy for freelancers and the self-employed.

On the other hand, if you’re looking for a plan that can be customized according to what your needs are or one that covers you no matter where you are, you might want to look into getting health insurance that’s been made specifically for remote workers and nomads. Safety Wing is an example of one such plan and has products that can cover you in both your home country and abroad.

5. Life insurance

Your life is valuable and if the worst is to happen, you would want your family and relatives to have some financial security after your passing. 

Keep in mind though that the types of life insurance available to you depend entirely on the country you live in. 

So, what insurance do I need to cover my freelance business?

Generally, insurance can be pretty helpful, but you should always try to evaluate the risk factors involved. If it is extremely unlikely that some of the situations described above will occur, your hard-earned money might be better spent elsewhere.

If you can afford them, however, and you often work with high profile clients, some of the insurance types might be a necessity.

Also remember that some insurances come in a bundle with significant discounts. Just make sure you consult with legal counsel before jumping into any financial agreements!

*Please note that this blog post should not be considered as a substitute for legal or financial advice. Each financial situation is different, The advice provided above is intended to be general and each freelancer should consider their particular financial situation before making any decisions.

Viktor Marinov

Viktor is the voice behind the freelancermap blog. Every week he comes up with helpful hints, checklists, and guides for freelancers and independent workers. If you would like to know how to find remote jobs online or how to niche yourself as a freelancer, don't miss his freelancer tips!

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