I had never even thought of this. Why would a freelance web developer need insurance? But, my older brother became an insurance agent and, during his initial training and certification, was taking classes on business insurance. That got him curious and he started asking me about it. I hadn’t realize how at-risk I actually was. So, I started doing some research on it and this is what I found.
Do freelancers need insurance? Yes. In fact, depending on your situation, you may want to get up to three different types of insurance to cover your freelance business: General Liability Insurance, Property Insurance and Professional Liability Insurance.
Let me give you an example.
In 2013, a British transcriber named Lesley Kemp was hit with an $82,630 lawsuit because of one tweet she’d sent. She was working with a Qatar-based client and they had paid her invoice late. So, she posted a tweet complaining about it.
They sued her.
The case was eventually dropped. And, lawsuits can be completely meritless, but you’ll still have to defend yourself. Hire lawyers and all that. Which can cost you thousands even if the case never even makes it to trial.
But, the right kind of insurance can cover these costs.
So, let’s talk about the three I mentioned:
General Liability Insurance
General Liability Insurance is as the name implies… protection from general liability for all sorts of things. Lawsuits and other claims. If you have an office or meet clients at a location that you own and they suffer some kind of bodily injury while on premises. Slander, libel and claims of copyright infringement.
Of course, it’s important to look at your exact policy.
Different companies and policies will (and will not) cover certain things. Generally, the way it works is your policy will have a limit (for example $1,000,000) and will cover any expenses up to that limit… whatever they may be.
Every freelancer should really have this kind of insurance. It’s not expensive and it’s a good foundational insurance to make sure you’re covered against most of the unexpected things you might encounter when freelancing.
And, I’ve seen companies offering $1,000,000 in coverage for as little as $19/month.
If you have a lot of expensive equipment, you’ll want to get this kind of insurance. Keep in mind, your homeowner’s or renter’s insurance (if you have it) won’t necessarily cover items you’ve purchased for your business.
So, don’t think you’re safe just because you have either of those.
You’ll want to talk with your insurance agent and find out where you stand coverage-wise, but I personally like to have my business and personal completely separate. So, I keep this kind of insurance to guarantee my business property is covered.
Lastly, let’s talk about…
Professional Liability Insurance
This will only apply in certain situations. If your work has some sort of licensing, then you’ll want to look into this kind of insurance. For example, doctors, lawyers, engineers… these professions all tend to have this kind of insurance.
But, IT consultants can fall into this category.
If the work you do requires any kind of certification or licensing, you have the potential to be sued if something goes wrong with a client. You make a mistake, you don’t fully deliver on the service you offer or you’re negligent in some way.
This insurance can help cover you.
Of course, I have to give you the..
I’m not an insurance agent or legal expert. I’m simply providing this information for educational purposes based on my personal experience. Nothing here should be construed as legal advice. It’s simply to give you general information and a general understanding of the different insurance options that might be available to you.
Of course, this is just one of the many things I’ve learned in my 15 years as a freelancer. And, I’ve found it’s things like this that “you don’t know, you don’t know” that once you do learn them can make all the difference.
Not just protecting your business.
But, getting clients.
Getting paid on time.
Making clients happy and turning them into repeat clients.
All the things you need to do to be successful as a freelancer. That’s why I created my “weird” online course called “Let’s Talk Freelance”. It’s a forum for me to share the things I’ve learned AND for you to ask questions and let me help you over the big things holding you back.
In any case, you can learn how to get access to it for free here.