What Freelancers Need To Know About Liability Insurance
The gig economy is roaring ahead at an unprecedented pace, leading literally millions of former 9-to-5 professionals to embrace the freelance lifestyle. Despite the ever-growing popularity of becoming a freelancer, however, many workers new to the gig economy have little to no clue what they’re getting into, particularly when it comes to attaining financial security and guaranteeing that their bases are covered in the event of an emergency.
When it comes to insurance, for instance, most freelancers have been left in the dark and have no idea where to begin covering themselves. Here’s what freelancers need to know about liability insurance, and why covering your nascent business can secure you from future peril.
The gig economy is growing
One of the reasons that insurance for freelancers is becoming a more prominent topic in this day and age is that the gig economy is growing and shows no sign of slowing down its rapid expansion anytime soon. According to data recently compiled and released by Upwork, for instance, at least 56.7 million Americans freelanced in 2018, a sizable leap of over 3 million from the preceding year. Now that there are more freelancers than ever before, many of these independent workers are struggling with things like insurance, which was likely managed at least in-part by their former employer.
Doubtlessly, many new freelancers were drawn to the gig economy because of the independence it offered them. Just because you enjoy a more versatile and flexible work environment right now doesn’t mean you can ignore the serious perils that are associated with freelancing, though. You don’t have a boss to answer to anymore, for instance, but this also means you don’t have a company-wide insurance policy to cover you in the event of an unexpected disaster. One of the most important things that new freelancers need to remember is that they’re on their own – for better or for worse.
Insurance and Freelancing
So, how does liability insurance come into play if you’re a freelancer? General liability insurance is likely a worthwhile investment if you’ve struck out to become a fully-fledged freelancer who offers services to other individuals or businesses. General liability insurance often protects you against advertising injuries, for instance, meaning that your freelancing service will have a leg to stand on if you’re sued for libel or copyright infringement. If another independent freelancer or major business asserts that you’ve violated their intellectual property rights, general liability insurance from the likes of Brokerlink.ca may be the only thing standing between you and financial oblivion.
Some clients could be seriously aggrieved by your actions against them and seek damages in the form of tens of thousands of dollars. For most independent freelancers, this would mean permanent financial insecurity, which is why considering insurance coverage is so important. If you host clients in your home, for instance, and inadvertently damage their property (such as a laptop) in the midst of your presentation, general liability insurance could prevent that client from financially ruining your business.
Some clients demand insurance
Another reason that freelancers should consider insuring themselves is that certain clients will demand that you have insurance coverage before dealing with you. Usually, these are clients who have been burned by other freelancers in the past, whether it was intentional or not, and now they’re highly skeptical of who they do business with. In order to snag these lucrative sources of income, you’ll need to prove to them that your business has insurance and isn’t a hazardous partner for them to pair themselves with.
Accidents happen anywhere
Workplace accidents are another reason to consider insurance coverage as a freelancer. If you think offices are the only place where accidents happen, think again; your home is your workplace, and the home isn’t always a totally safe environment. Health insurance providers may deny your claim if it was “on the job activity,” even though your status as a freelancer turns your home – a likely place for an accident – into your only workspace. That’s why ambitious startups have been emerging with hopes to lure in freelancers with customized insurance plans catered towards the gig economy and its workers.
The most obvious reason that you should consider insurance as a freelancer is that the very nature of your work dictates that you won’t have a social safety net. There’s no company to save you if you fall into trouble, and no severance package to live off if things go wrong and your business fails. Having insurance, then, could be the one thing which guarantees your financial future if you’re struggling to establish yourself as a freelancer in a market that’s still fairly hostile to them.
Understand that insurance isn’t just for 9-to-5 professionals but is indeed very important for freelancers, and soon you’ll be earning money in the gig economy and resting soundly at night, confident that you’re covered in the event of an unexpected disaster.