Do Freelancers Need it?

Introduction

So this is something that I had never really even thought of because why would a freelance web developer need business insurance? But my older brother became an insurance agent. He was going through his initial training and certification. They were learning about business insurance, and it got him curious. So he started asking me about my business, my insurance, and so forth. And turns out, turns out I was a lot more at risk than what I thought.

Common Misconceptions

Now, before I get into those, I know what you might be thinking, what I was thinking back then: “Really, do I need insurance, and up to three different kinds of insurance? Is that really legit?” So let me give you an example. So in 2013, there was a British transcriber freelancer named Leslie Kemp who was hit with an eighty-two thousand six hundred and thirty-dollar lawsuit because of one tweet that she had sent.

Example of a Lawsuit

So what happened is she was working with a Qatar-based client, and they had paid her invoice late. So she decided to go on Twitter and send a tweet complaining about it, mentioned them by name, and they ended up suing her for libel. Now, the case was eventually dropped, not necessarily because it didn’t have any merit, but because, I guess, in Britain, there’s this huge fee in order to initiate a lawsuit, and they didn’t want to pay it. They still felt like they had a case, but it was dropped.

• And it’s true that lawsuits can be meritless
• But even still, you’re gonna have to defend yourself
• Hire lawyers
• And all that sort of thing
• Which can cost you thousands in and of itself
• Even if the case never makes it to trial
• But if you have the right kind of insurance
• It can cover those costs
• So that may be an extreme example
• But it’s put the potential that can happen out there
• And why you just want to sort of cover your bases
• If someone can get sued for one tweet
• Imagine all of the other things that you might be able to get sued for as a freelancer

Types of Insurance for Freelancers

General Liability Insurance

So let’s talk about the three that I mentioned. The first one is general liability insurance. It is, as the name implies, general liability insurance. So it’s protection from general liability from all sorts of things: lawsuits, other claims, bodily injury claims. So if you have an office or you meet people at a location that you own and let’s say it’s icy out and they slip and fall, it can potentially cover those sorts of claims: slander, libel, copyright, all of those different things.

Now, of course, it’s important to look at your exact policy, what it doesn’t cover. Different companies, different policies, they’re gonna cover different things. So you really want to hone in on exactly what your policy does and does not cover. But generally, the way it works is that your policy is gonna have a limit. So let’s say a million dollars, and they’re just gonna cover any expenses up to that limit, whatever they may be.

• So I think every freelancer should have this kind of insurance
• It’s not expensive
• And it’s a really good foundational base coverage to cover all the unexpected things
• The things that you’re not thinking of that might pop up while you’re freelancing
• And I’ve seen companies offering up to a million dollars worth of insurance for as little as $19 a month
• So it’s a really small investment to make sure your bases are covered
• And you don’t have to worry about it all

Property Insurance

Next up is property insurance. So if you have a lot of expensive equipment, I think you’ll want to get this type of insurance. Now, keep in mind, if you have homeowners or renters insurance, that won’t necessarily cover the items that you’ve purchased for or through your business. So you don’t want to just assume that you’re safe because you have either of those. It really depends on your policy.

So you want to talk with your insurance agent, find out where you stand coverage-wise. But me personally, I like to keep my personal and business just completely separate. So I like having business insurance, business property insurance for my business equipment to ensure and guarantee that it’s covered, and I don’t have to worry about it.

Professional Liability Insurance

All right, the last one then is professional liability insurance. So this is the one that is definitely optional. It’s only gonna apply in certain situations. So if your work has some sort of licensing, then you want to look into whether or not you want this kind of insurance. So for example, doctors, lawyers, engineers, those professions all tend to have some form of this kind of insurance.

• But IT consultants can also fall into this category if the work that you do requires any kind of certification or licensing
• There’s this idea that you are now being positioned and certified as an expert
• So you become a lot more liable and on the hook for potential mistakes and negligence and so forth
• You could be sued if something goes wrong with a client
• So you, again, you just, if you fall into that category
• You have some sort of certification
• There’s some sort of licensing that goes along with what you do
• Then you’ll definitely want to look into this kind of insurance
• Talk to your agent
• See if it applies
• And see if it’s a good fit for what you do

Conclusion

So those are the three different types that you potentially want to get. Like I said, I highly recommend general liability and, if you have a lot of expensive equipment.