Today, 53 million Americans do freelance work: that is more than one in three Americans who work independently. Freelancing is no longer a field for a select few — today’s freelance workers include everyone from field service technicians and graphic designers to temps — but they often have one thing in common: they are responsible for protecting and insuring their own health and incomes.
In a country where insurance is usually tied to employment, freelancers can be vulnerable. Fortunately, there are more and more options for freelancers to receive the benefits salaried employees receive.
As a freelancer, the risk of experiencing a technical failure on a client’s project can be costly — even if the error wasn’t your fault, a lawsuit from an unhappy client can set you back significantly. You’re also vulnerable to financial grief if you ever become sick or injured, as each day you’re unable to work is a day of lost income potential. In order to keep operations running smoothly and protect against expensive mishaps, it’s critical for freelancers to have liability and health insurance; here are some plans worth considering.
General and Professional Liability Insurance
As a freelancer, liability insurance protects you against paying tens of thousands of dollars in damages to a client when something related to your project goes awry, whether or not it was your fault. If one of your suppliers gives you a faulty part that leads to an equipment failure, a patron gets food poisoning at your restaurant, you may find yourself in the unfortunate position of being sued.
Keep in mind that if a client takes you to court, even if you win the case, you could be out of pocket for expenses relating to the case like attorney’s fees, filing fees, and more. This makes liability insurance essential, even if you’re in the right.
Many clients will require the freelancers they work with to have liability insurance; but whether or not this is part of your client’s contract, it’s a good idea to get this insurance for yourself. It’s better to be safe than sorry — when you run into that one untimely mishap that could have forced you to close your doors completely, you’ll feel safe and sound knowing you have protection in place.
There are different types of liability insurance, and the importance of each varies depending on the field you work in. If you are a photographer, you may want to look into cyber liability insurance (in case of a ruined memory card), or business property insurance for important equipment, like your camera. For most freelancers, though, the two common kinds of liability insurance required by clients are:
- Professional liability insurance, also known as errors and omissions insurance (E&O), protects you from claims regarding negligent performance of your professional services. In other words, it is your shield in the case that an unsatisfied claims you did not provide the work or services as agreed upon in your contract. This insurance is particularly important to consultants, or others who lend professional advice.
- General liability insurance protects your business from third party claims for bodily injury, medical costs, and damage to someone else’s property.
Depending on your income levels and type of business, it may make sense for you to incorporate — which shields you, the individual, from some liability. Consult a lawyer or insurance provider to see what makes the most sense for you.
If liability insurance is the best way for you to go, there are a number of reasonably priced options for you to consider.
Freelancers Union’s plans start at $22.50/month, while online platforms like Field Nation provide business insurance on a job-by-job basis — ideal for freelancers who don’t want to be tied down to a monthly payment, or a single provider. Field Nation also makes it easy to file a claim, and helps freelancers take care of all their professional insurance needs.
If you have ever looked for health insurance online, or used a government exchange, you know it can be overwhelming. It’s all too easy for buying health insurance to fall to the bottom of the busy freelancer’s “to-do” list.
Yet it’s not only important to make sure your health is protected – with the Affordable Care Act, it’s now the law.
To make it easier for freelancers to find health insurance, Freelancers Union offers a National Benefits Platform with a small number of insurance carriers, hand-picked for their policies that give freelancers the highest value for their money. The platform also includes definitions for common insurance terms such as “out of pocket maximum” and “medical home rider,” so you can brush up on the jargon, and have confidence in choosing a plan that meets your needs.
As a freelancer, you are your business’ most valuable asset and you need to insure yourself accordingly. Don’t let a business deal gone south, or an unforeseen hospital bill, torpedo your finances and your ability to do business – get the liability and health insurance you need.