Freelancer Insurance: 6 Types of Insurance to Buy

freelancer insurance types freelance insurer policy contractor coverage

The United States is fast becoming a freelance nation. There are over 56 million freelance workers, which is about a third of the American workforce.

Freelancing has its perks. You get to work from wherever you like and, for the most part, you’re your own boss. It has downsides, though. A major one is freelancers miss out on essential employer benefits, such as health insurance.

This doesn’t mean you shouldn’t be insured. In fact, you ought to buy various types of insurance policies.

Continue reading this freelancer insurance guide to learn about policies that you shouldn’t live without.

1. Health Insurance

Did you know medical bills are a leading cause of bankruptcy?

If you’re in good health, it might be hard to see how healthcare expenses can push you into bankruptcy, but these occurrences are far too common.

You even don’t have to be ill for a prolonged amount of time for your hospital bills to spiral out of control. A single personal injury accident can turn your life upside down in a heartbeat and leave you needing intensive healthcare.

Without health insurance or a personal injury cover, you’ll have to pay for your expenses out-of-pocket. Healthcare is one of the priciest services in the U.S., so spending a few days in the hospital can easily earn you a five-figure bill.

Do you have that kind of money sitting around? Even if you do, the last thing you want to spend it on is healthcare.

This is why health insurance is a must-have. And not just any kind of health insurance, but a policy with adequate coverage; otherwise, you’ll easily max out your benefits and pay the rest of the bill out-of-pocket.

There’s health insurance for freelancers if you want a policy that’s customized to your lifestyle.

2. Professional Liability Insurance

Most people think of freelancers as writers, editors, and techies (programmers, coders, and web designers.) These don’t really need professional liability insurance, right?

If you’re a writer, for instance, you might need to buy professional liability insurance. It’s unlikely that your craft would bring the kind of harm that would make anyone want to sue you.

But here is the thing: Almost anyone can be a freelancer. Accountants, lawyers, and even doctors can be freelancers.

If you’re in a profession where you’re likely to be sued for professional malpractice or negligence, you need to purchase professional liability insurance.

If you’re a business consultant, for example, you might make errors that could cause a client’s company to make major losses. The client might sue you for compensation and if they win, you’ll have to pay them. When you’ve professional liability insurance, your insurer will take care of such costs.

3. Home Insurance for Freelancers

If you’re like most freelancers, you work from home. You probably have a home office, too.

Ever thought what would happen to your freelance job if you lost your home to a fire or natural disaster? Your computer and other important devices could crumble to pieces along with your home. Maybe you will lose valuable work projects too.

Home insurance for freelancers can help make such losses more bearable.

Now, if you’re a homeowner, you certainly already have homeowner’s insurance. Don’t assume that’s enough. There are special add-ons that you should purchase to get adequate coverage.

For example, if you’re a YouTuber and you use one room in your home as a studio, you’ve got valuable equipment that an ordinary homeowner’s insurance policy won’t cover in case of damage. So, when you purchase home insurance for freelancers, the policy specifically covers your work equipment.

4. Disability Insurance

As a freelancer, you’ve to work to earn income. This feature is like a double-edged sword.

If you put in some hard work and get multiple high-paying clients, you could make a lot more money in a month than you would make in traditional employment. Unfortunately, this also means that if you’re unable to work, perhaps you get ill, you won’t be making any money.

How will you pay your bills and take care of other financial obligations? This is where disability insurance comes in handy.

When you have this coverage, the insurer will make payments that’ll essentially replace your income in the event that you’ve sustained an injury or illness that renders you unable to do your freelance gigs.

5. Auto Insurance for Freelancers

By default, you will purchase auto insurance as soon as you buy a car.

However, auto insurance policies aren’t created equal. Some will just cover your liability when you hit someone or damage their property. Others will provide more comprehensive coverage.

None of those, though, will meet your needs if you’re a freelancer who uses their car for work.

Let’s say you’re a freelance painter. You often drive your car to make deliveries to clients or just to meet them.

In this case, you’re using your car for business. If you’ve got regular auto coverage and you’re involved in an accident that damages your pieces of art, the insurer won’t compensate you for the lost art.

But if you’ve auto insurance for freelancers, you’ll likely get monetary compensation for the lost art.

6. Life Insurance

Do you support anyone financially apart from yourself? If yes, purchasing life insurance is a pretty good idea.

Maybe you have a spouse, child, or sibling who depends on you. If you were to die, who would take care of their financial needs?

Life insurance solves this problem. With this policy, the insurer will pay a predetermined sum of money to your beneficiaries. As a freelancer, this is even more pertinent, because you likely live gig to gig. 

There are different types of life insurance, so be sure to do more research before buying.

Freelancer Insurance: Cover Your Risks

A smart freelancer identifies their risks and takes steps to minimize exposure to those risks. 

Purchasing insurance is an effective risk management strategy. With this guide to freelancer insurance, you now know the various types of insurance policies you should buy.

Keep tabs on our blog for more freelancer insurance tips and insights. Visit the Insurance section of the Bootstrap Business Blog for more information on policy coverage.

Official Bootstrap Business Blog Newest Posts From Mike Schiemer Partners And News Outlets