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Freelance Insurance 101: What You Need to Know

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Why Freelancers Need Liability Insurance

Being a freelancer means that you have flexible work hours, no one to answer to, and can take on whatever projects you like. It often means more freedom—but it also leaves you open to risks you may not face if you had an employer. If something goes wrong, the blame lands squarely on your shoulders. As a freelancer, you may not think you face much liability. Even though you don't work for an employer, you still have to answer to your clients. You still have risks involved and must protect your business with the proper liability coverage.

Who Needs Freelance Liability Insurance? 

Do you offer professional advice? Can professional errors that you make hurt people or cause significant property damage? Some of the freelancers that may need to consider insurance include:

  • Web designers
  • Graphic designers
  • Programmers
  • Photographers
  • SEO Managers/Analysts
  • Accountants
  • Real Estate Agents
  • Business Consultants

Anyone who works as an independent contractor should consider freelance insurance

The Types of Insurance Freelancers Need

So what kind of business insurance should freelancers consider? 

Professional Liability Insurance

Professional liability coverage—also referred to as errors and omissions (E&O) or professional indemnity insurance—protects your small business if you make professional mistakes, including alleged or actual negligence, missing deadlines, undelivered services, breach of nondisclosure, claims of libel/slander, copyright infringement, and more. 

Example: You’ve signed a contract with a business that needs a complete overhaul of their website. You’ve agreed to complete the project in two months. Unfortunately, you fall behind schedule and their project isn’t completed on time. They sue you for breach of contract for the missed deadline. But if you have professional liability insurance, your insurance company will provide a legal defense and cover settlement costs.

General Liability Insurance

General liability insurance protects small business owners from liability for third-party bodily injury, third-party property damage, and advertising injury (defamation, copyright infringement, etc.). 

Example: You’re hired to help a company design their brand, including their new logo. They love your completed design and move forward with the project. However, you both find out that the logo is too similar to a copyrighted design. You’re sued for copyright infringement and required to redesign the logo. General liability insurance can protect you by covering the associated costs. 

Cyber Liability Insurance

Many freelancers can work remotely and likely work almost entirely from a laptop. If you use a computer with internet access for your job, you open yourself up to the risk of data breaches. If you store or use client information in the course of your job, cyber liability insurance can protect you both. If you’re the subject of a hacker, your insurance company can help you notify those affected, pay for credit monitoring and identity theft protection, and even help negotiate and pay ransoms.

Example: One of your clients notifies you that they can't access their website and are getting an error message. As their technical support, you try to determine what's wrong. It turns out that every client website you support has been hacked, leaving you open to lawsuits. As a freelancer, you can't afford to pay claims like these. The right cyber liability policy can protect you—and your clients.

Business Owner's Policy

A business owners' policy (BOP) is a package that usually includes general liability insurance, commercial property insurance, and business interruption insurance.

A BOP is usually offered to small businesses at a discounted rate compared to purchasing each insurance policy individually. 

Personal Insurance Options

Because you don’t work for an employer, you are responsible for providing your own health insurance, life insurance, and disability insurance. Many freelance business operations use the Freelancers Union as a resource and for a community of support.

You’ll also need to invest in: 

  • Home Insurance/Renters Insurance: This is sufficient to cover your home and home office, your personal property, and some level of business property. Business property is usually capped at a certain dollar amount, so check with an agent to see how much coverage you have. 
  • Auto Insurance: You need personal auto insurance to protect you and your vehicle if you’re in an accident. However, if you use your vehicle for business purposes, you may need to consider adding on commercial auto coverage

How Much Does Freelancer Insurance Cost?

Insurance for freelancers doesn't have to cost a lot. Multiple factors that impact the price of your policies, including:

  • The policies and policy limits you choose
  • Whether or not you have a home office or commercial space
  • Your annual revenue
  • The type of jobs you do
  • The insurance coverage you choose
  • The state/city you operate in

These are just a few of the things that can change what you pay for coverage. We always recommend speaking with an insurance broker if you have any questions about the coverage your business needs.

How to Get Freelancers Insurance

Do you have more questions? If you'd like more information or are interested in getting a quote, feel free to reach out! You can call us at 877-907-5267 or complete the form at the top of the page and someone will reach out. Let us help you get the protection you need for your business!

Otherwise, check out more of our free resources to help you plan how to protect your freelance business.

Insurance I needed, explained simply.
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Very easy and straight to the point. I got my insurance in a quick and timely manner.
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