Ditched the traditional 9–5 in search of a more liberating working schedule? Kudos to you for taking the leap of faith. You’ve worked hard to get here and deserve to be at the pinnacle. But between managing your business and taking care of clients, don’t forget about security and privacy.
Full-time freelancers or independent contractors, like brick-and-mortar businesses, risk losing their equipment, client records (whether on paper or stored in a PC), and more. What if a client slips on a puddle of spilled water? Or perhaps a pipe bursts and you can’t welcome clients for a few days?
That’s where insurance “saves” us. Insurance is more than protection against accidents. While having a policy does serve this purpose, insurance also prevents misunderstandings about the scope of your services. And all professionals can appreciate this concern, no matter how and where they work.
Here’s why investing in insurance is a good idea for freelancers. Plus, learn how to find the right plan.
Why do you need freelance business insurance?
Let’s look at the big picture of what an insurance policy can do for your business. It’s not just about backing during a legal dispute but also hedging your risks in worst-case scenarios. Here’s how insurance covers your freelance company:
- Business claims: Even if you have a personal insurance policy, it won’t cover claims for losses and damages due to an accident or oversight at your workplace during business hours. So you'll want to be insured if you have a formal office space.
- Property loss: Your equipment can get damaged whether you work from home or in an office. And remote coaches depend on their equipment –– such as PCs, cell phones, and digital software –– to get work done, while in-person freelancers need a dedicated office space, electronic gadgets, and furniture for clients. Insure your property so you don’t have to shell out if the worst happens.
- Misunderstandings: Insurance helps you delineate what you and your clients are responsible for in your working relationship and who can be held liable for what in the case of lawsuits. Knowing what insurance policies cover helps you write your services agreement and regulations so you and your clients are on the same page from the start.
- Professionalism: Insurance adds a level of formality to your business. Having a policy helps clients take your company seriously and rest assured. They understand that you’re doing your best to protect the interests of both parties.
What should your freelance insurance cover?
While none of us like to think about worst-case scenarios, it’s a good idea to consider them to determine what insurance you need. Make a list of anything that could go wrong with your business, and seek coverage for these potential scenarios.
All businesses are different, and a work-from-home coach who runs online sessions has different needs from someone who provides in-person services in an office space. Here are some common insurance coverage areas to explore. Think of this as a menu of options to decide what’s right for your business.
- Third-party injury
- Legal costs in case you need a lawyer
- Property damage (your own and third party)
- Cyberattacks, hacking, and data breaches
- Misunderstandings with clients
Types of insurance for freelancers
Let’s explore different types of small business insurance appropriate for freelance coaches. As you consider plans, ensure that the policies cover these areas:
- Professional liability insurance: Freelancers' liability insurance protects you against claims that you’ve made a professional error or not fulfilled your responsibilities. Errors and omissions (E&O) insurance falls under this category and is a wise choice for coaches. This insurance protects you if a client accuses you of negligence or inadequate services.
- General liability insurance: Safeguard yourself (and your employees) against bodily injuries and damages that could occur in your workplace.
- Cybersecurity insurance: Keep your client’s data safe from hackers and data breaches with cyber liability insurance. We also recommend using a secure customer relationship management (CRM) tool, such as Practice’s, to store clients’ data to prevent unwanted third parties from accessing it.
- Business interruption insurance: If your computer crashes or another unforeseen circumstance interrupts your work, protect yourself from financial loss with this type of insurance.
- Personal health insurance: As an independent contractor, you’re the sole provider of your services, so you need to stay well to provide them. Plus, since you don’t work for an employer who provides insurance for you, you’ll need to take care of yourself by having a personal insurance policy that covers injury, healthcare, and other accidents.
How much does insurance cost?
Sometimes, people avoid investing in an insurance policy because they’re on a tight budget and think the chances are low that something will go wrong. While we hope you never run into issues, face fatal accidents, or undergo legal proceedings, there’s always a “what if.” That’s why getting an insurance policy is both essential and wise. For those on a budget, figure this expense into your start-up fees or overhead.
Your insurance’s cost will depend on the type of policy you get and the service provider you use, but to give you a ballpark figure, an insurance policy for freelance work costs around $400. Many policies that offer self-employed liability insurance cost $300–$600 annually. Here are a few insurance companies to consider:
- Hiscox provides a wide array of policies specifically for small businesses. The company claims to provide a suited policy with quote in 20 seconds. All you need to do is choose your domain and work.
- Embroker caters to businesses of all sizes. It offers a chat feature, making it easy for clients to directly interact with an expert and seek guidance. The company lets clients customize insurance policies per their requirements.
- Thimble specializes in covering self-employed professionals –– ranging from photographers to pet sitters. The company aims to provide insurance policies to people within minutes, enabling tweaks and edits even after purchasing the policy.
As you peruse your potential insurance providers, ask for formal quotes. Get in touch with an agent and have them draw up a quote for the coverage you need. Then, compare numbers and the reach of coverage in each plan and make an educated decision.
Take your freelance business to the next level with Practice
Insurance is there when you need it — whether in an unfortunate dispute with a client or if you require healthcare services. While insurance protects you on a proverbial rainy day, you can save your business’s interests all the time by keeping your clients’ data safe and staying organized and on top of your tasks.
Leverage Practice’s CRM tool, designed with coaches in mind, to streamline your business’s administrative tasks. Protect sensitive information from data breaches by storing your data in a secure place. Send messages and documents safely, and receive payments on time. Try it today.