freelancer hard at work on his laptop at a coffee shop

Liability Insurance for Freelancers: Professional vs. General

These days there is so much choice in terms of the employment opportunities. More people are going into business for themselves and freelancing. If this is a career path that you have taken, it is important you are prepared.

This means taking steps to ensure you are doing all you can to become more successful as a freelancer. There are so many elements involved in going down this career path, and it is important to think about how you can improve things. Considering the insurance you need to get as a freelancer is important, one of the big concerns is liability insurance. It is important to make sure you understand what liability insurance is, and why you need it as a freelancer.

What work do freelancers do?

Freelancers can do many jobs these days, and it is important to think about what you might do as a freelancing professional. “Freelancer” is a broad term given to anyone who is self-employed and works for themselves, with a pool of clients they work for. Freelancers often run businesses, but sometimes they are just individuals working for themselves.

The work freelancers might do includes graphic design, blogging, photography, web design, marketing, bookkeeping, and writing. Businesses often outsource content to them rather than hiring permanent staff. As a freelancer, you need to have measures in place to protect yourself (and your clients) from legal issues.

Why do they need insurance?

Why do freelancers need insurance? As a freelancer, you are not part of an organization, and therefore you are liable in the event of any legal issues. As an independent contractor, you are in business for yourself, and this is why it is so important to protect yourself with business insurance.

You’ve got to safeguard your assets as a freelancer, and this could mean covering your premises in the event of fire damage, or to protect yourself if clients claim you’ve caused them financial loss. Lawsuits are not something you want to deal with as a business owner, and they will not do your future business prospects justice.

Why aren’t they covered under client policies?

It’s true that many traditional business policies are not designed with freelancers in mind. This is due to the fact that freelancers have a less rigid structure to the jobs they do, and this can make it more difficult to pigeon hole. Business insurance will generally cover the company for liabilities, but as a freelancer, you are more exposed to more risks than you would be as an employee.

You’ll also be responsible for any damages or legal claims that arise. Since you aren’t covered by traditional policies, you are not protected in the event of things like discrimination.

This goes back to the National Labor Relations Act passed by Roosevelt in the mid-1930s, which stated that independent contractors would not be afforded the same insurance and protection as employees. You need to know about the different forms of insurance necessary for you, as a business owner, to protect yourself better.

Professional liability

Professional liability insurance is one of the most important components you need to get right. This will provide you with coverage and protection against legal issues when a client claims that your professional negligence led to financial losses on their part. This is something that can (and does) happen when you are a freelancer, so you need to make sure you are protecting yourself against it. This form of liability insurance for freelancers is crucial for dealing with the legal side of your career.

Sometimes known as errors and omissions, professional liability insurance policies exist to give freelancers watertight protection if any claims are made against them. There are many factors that could cause a client to take legal action against a freelancer, and often it’s something that is nobody’s fault, it’s simply the nature of the business world.

General liability

Another form of insurance you should look into as a freelancer is general liability insurance. This differs from professional liability insurance because it doesn’t cover specific work you might have done for a client. Instead, this is a policy to cover personal injury or damage to property that may occur on your premises or because of the work you are doing. This can also sometimes cover instances of slander or plagiarism.

One important component of general liability insurance is that it can protect you in case your equipment is damaged. As a freelancer, you need access to your equipment, and general liability insurance can be combined with coverage for items essential for your work, such as a laptop or camera. Make sure you find the best general liability insurance that suits your needs as a freelancer to protect yourself as much as possible.

These are some factors you have to consider when sorting out your business liability insurance. There are many factors that contribute to your success or failure as a freelancer. Determine the right insurance for you and your freelancing business because it will protect your future and give you a legal shield from any issues that might arise because of freelancing. Now that you understand the difference, it is important to make the right choice and move forward.