Many freelancers out there don’t see themselves as proper businesses. But from the second you start charging others for your services, you have to see yourself as one, and failing to do so can be a fatal mistake.
It’s vital to have the right protections in place that will ensure that, in the event of a serious issue, you have the cover you need for your business to survive. A small accident here or an illness there and your potential to earn money could disappear overnight and be replaced by huge legal fees and a massive compensation bill to another party.
With this in mind, here are some of the protections you might need for your freelance business.
Commercial or general liability insurance
Commercial or general liability insurance will cover you in the event you are responsible for accidents to contractors, clients, customers, suppliers, or anyone else that comes into contact with your business. This type of insurance also covers you against equipment damage. It doesn’t matter whether you are a freelance IT consultant, a real estate agent or a web developer – all freelancers should have this liability protection if they want to avoid nasty scenarios destroying your business – and personal finances.
Errors and omissions
In some cases, you might need to consider errors and omissions liability insurance – or E&O insurance. It covers you for any oversights or negligence that you do that might cause harm to your clients. However, if you are working as a freelance doctor, nurse, or another medical profession, you should seek out specialist medical malpractice insurance.
While we are on the subject of healthcare, freelancers should also get health, disability, and life insurance. As a freelancer, you don’t have the benefits of things like sick pay, and if you can’t work, you won’t earn. And if something serious happens – a chronic illness or disability, for example – it could cause severe financial damage. If the accident or illness is someone else’s fault, you might be OK. As hastingsfirm.com point out, it might be that you can claim for medical negligence and personal injury. But, ultimately, these cases can last a long time, and you will still need to cover yourself – disability and health insurance should give you enough to survive until you get your compensation.
Do you drive to work for your business? Perhaps you work as a freelance driver for Uber or Metromile, or one of the other new breed of cab companies. According to Forbes.com, while you might have auto insurance, the chances are that you won’t have the correct level of cover – or liability – if you hit someone. Clearly, this could result in incredibly serious financial implications for you, as any compensation claim made against you will need to be covered by your own money. Your ride-sharing company will be highly unlikely to take any responsibility, and it’s something you will need to face alone.
There are, of course, many different types of insurance out there that can cover your freelance business for any eventuality. Make sure that you investigate all your options and never leave anything to chance.