Freelancers and Insurance
Freelancing is on an upward trend. The number of U.S. workers in home offices reached 55 million in 2016, up from 53.7 million the year before. Making up 35 percent of the workforce, the segment collectively earned $1 trillion last year, according to a “Freelancing in America: 2016” survey.
Behind the growth is today’s economy, pushing ever more people to create their own jobs. Proliferating freelance platforms and apps such as Uber buoy this kind of professional activity. There are full-time freelancers—those who love being their own boss—and part-time freelancers, those who do it for an additional income.
Overall, they tend to be happy with their work, 79 percent of those surveyed saying freelancing is better than a traditional job. And what’s not to like? You get to set your own schedule, take only the projects you want, be as creative as you wish and wear whatever you please while doing so.
As a freelancer, you take on much more responsibility—for your projects and for your own success. It sounds awesome and at the same time terrifying. In particular, being in charge with your insurance needs can be daunting. Corporate employees are at ease with the package of benefits arranged by the company, while out in the free world you have to find and choose the insurance plan you want and can afford.
Then there’s the unsteady income, the lack of unemployment insurance and the lack of access to affordable healthcare. In fact, the survey showed that 20 percent of full-time freelancers still didn’t have health insurance. But still, insurance is the biggest challenge. With this in mind, we’ve charted the types of insurance that will keep you covered in the worst scenarios.
Get renters insurance. The policy is basically your home office insurance—you’ll need to add a rider to cover your business property, such as your computer. For the cost of a pair of shoes, your possessions are covered against fire, theft and water damage. Renters or homeowners insurance plus a business rider is everything a freelancer, who is just starting out on their own, needs. One more thing, confirm that your policy also covers additional living expenses in case your current home becomes inhabitable.
This type of policy is what covers a wide array of products—simply put, liability insurance covers you when you get sued for something. Moreover, contracts with different companies might require you to have the policy, so it’s an essential investment for when you start your business.
There are many different kinds of liability insurance, with professional and general policies as the most common ones. Professional liability insurance (aka errors and omissions insurance) protects your business from claims that you failed to offer professional services. This type of policy is mostly designed for professions such as accountants, lawyers, physicians and real estate agents. General liability insurance is your shield against third-party claims that you damaged someone’s property or caused bodily injury. As renters insurance, this policy has a deductible—negotiate the level that’s most suitable for you, but pay attention to two factors: exclusions and legal fees. Some contracts will include exclusions—meaning the policy won’t be able to protect you in particular scenarios, while others will offer separate guidelines around legal fees rather than including them in the covered liability.