Freelancer insurance is a type of insurance that freelancers typically purchase to protect themselves and their assets in case something goes wrong. Freelancers may also purchase this type of insurance as a precaution against things such as denial of coverage by an independent contractor’s liability policy, medical emergencies, and business interruptions. Freelancers often experience these types of delays due to complex requirements for coverage. This type of insurance may include plans that protect against loss or damage for both property and liability.
What is Freelancer Insurance?
Freelancer insurance is typically purchased with either a fixed-term or an annual contract. Each plan will have its specific terms and conditions surrounding how it can be cancelled. When choosing freelancer insurance, freelancers need to consider the various types of coverage available and what level of protection they need for their business assets, liability and medical costs. It is also essential to identify relevant legal requirements that apply to you as a freelancer before purchasing any premium.
Freelance insurance is commonly sold on a “premium” basis. For example, the plan’s cost may be based on a monthly premium, while the annual rate is generally less expensive. Or you may choose an annual premium and then add additional coverage options (for example, electronic contracting and storage and business interruption) for an additional cost. Some freelance insurance plans include options such as umbrella insurance to help cover all your risks in case other types of losses occur.
Freelance insurance plans are designed to protect you in two ways:
- Against property damage: It is recommended that all types of freelance insurance include coverage against property damage. Most plans cover loss or damage to your business assets (such as electronics, computers, electronic equipment, furniture, office equipment, fixtures and fittings) and personal assets (such as jewellery or possessions).
- Against liability: It is also recommended that freelancers purchase insurance plans that protect them against liability issues. Most plans cover bodily injury, property damage, medical expenses, legal defence costs and personal liability.
Freelancers should be aware that the amount of coverage they receive for liability for their business may differ from other types of businesses. Freelancer insurance is generally referred to as “general liability” insurance. General liability coverage protects you against bodily injury or property damage caused by the fault or negligence of another person, regardless of their relationship to you, your employees or employees working under your direction.
It does not provide coverage for legally required actions taken by you, your employees, or employees working under your direction. The coverage also does not protect punitive damages caused by the fault or negligence of another person.
What Does Freelancer Insurance Cover?
Many freelancer insurance plans include liability protection for non-professional services. This type of coverage is often called “personal liability coverage.” A freelancer may have clients or customers who are not professional. For example, if a freelancer spends time on a hobby or “after hours” business, this type of activity might not be related to the professional work they do on behalf of their clients. If these ventures cause an injury to another person, you could be held liable for that damage. However, if you are a non-licensed individual or work through an unlicensed company, there may also be limits on the types of insurance you can buy and the terms and conditions that apply to your coverage.
Freelance insurance plans are designed to protect freelancers against three common types of losses:
- Property losses: These are the most common types of losses that freelancers face during their careers. The most common types of resulting claims are property damage, liability issues and business interruption.
- Medical expenses: A freelancer may be unable to work due to an injury or medical emergency.
- Business interruption: If your freelance business cannot operate due to circumstances beyond your control, you may be eligible for compensation. Examples of common causes of business interruption include property damage, liability issues, natural disasters and acts of terrorism.
Freelancer insurance may also provide medical and dental expenses in case of illness or injury. In many cases, this coverage is for any freelancer and not specific to professional services rendered. Some freelancer insurance plans extend to workers compensation in case of injury on the job. Lastly, freelancer insurance will also provide some level of reimbursement for lawyer fees.
What Kind of Coverage is Included in Freelancer Insurance?
Freelance insurance plans include various levels of coverage. Before you purchase your freelancer insurance plan, it is essential to know your limits and how much coverage you will need for your business and assets. As a freelancer, you probably use many different types of tools and services to help you work. Most freelance insurance plans also include “add on” options that allow you to customize your plan, so it offers more protection for the items and services that are most important to your business. For example, many freelancers use computers as part of their day-to-day business operations. Many freelance insurance plans include liability protection for computer equipment, computers and electronics.
Freelancer insurance may provide coverage for temporary income protection if you are temporarily unable to work because of an injury or illness. The insurance will pay a portion of your income if you cannot work for some time due to an injury or illness. The amount you receive may be based on the number of days since the date of your accident or illness. There is often a waiting period before you can claim temporary income protection. Most plans require that you remain out of work for five to seven consecutive days before becoming eligible to make a claim. It can be challenging to prove your income level as a freelancer, so keeping good documentation is standard practice that will help in an unexpected event.
It is recommended that you shop around for freelancer insurance and compare quotes from several different plans. Free comparison quotes can be obtained online through independent consulting firms. This will allow you to compare several plans based on the type of coverage provided, level of protection and price. Find out more about freelancer insurance here.
Other useful links about business insurance:
Business Contents Insurance
Business Building Insurance
Employers’ Liability Insurance
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