Business Insurance for Freelancers and Solopreneurs

Is commercial insurance for freelancers necessary, or is it something you can skip until your business gets bigger?

Freelancers and solopreneurs don't often consider insurance coverage for their businesses, particularly when they're just starting. Yet, your freelance business is just as likely to run into a potential risk as the full-service agency down the street — the one with 35 employees and seven-figure profits.

The only difference between you is that without insurance coverage, a single incident could mean the end of your small solopreneur venture. That big agency with the big insurance policy? They will survive a liability claim and live to see another day.

If you're a freelancer, solopreneur, or running a home-based business, find out what policies will offer you the best protection.

General Liability Insurance

Every business can benefit from the coverage provided by general liability insurance, no matter your service, size, or specialty.

General liability insurance is designed to protect you against the risks of third-party injury or property damage. It's a safeguard if someone's body or belongings get damaged due to your business activities.

Imagine you have a customer stopping by your home to pick up the custom-made pet portraits or hand-beaded bracelets you sell. What happens if that customer trips over a hose left out in your driveway in the summer or slips on an icy patch of concrete in the winter?

You could be liable for the injuries that occurred.

The average cost of a customer slip-and-fall liability claim is $30,000.

What would it do to your business if you had to write a check for $30k to pay for someone else's medical and legal fees?

Service-based business providers aren't immune to third-party liability risks, either.

If you provide hair services, you could be sued for injuring a client if you accidentally nip someone with your shears or clippers.

Do you go to other people's homes or accept responsibility for their belongings as part of your service? Mobile detail services, dog walkers, home inspectors, house cleaners, locksmiths... the list goes on and on. You risk third-party property damage if you are at a client's home or handling their property.

One particularly noteworthy feature of general liability insurance includes protection against advertising injuries, including:

• Slander
• Libel
• Trademark or copyright infringement

If you are a freelancer who engages in marketing materials (for clients or your own business), this protection alone could be worth the cost of your policy.

Advertising injury coverage can help protect you in the event a competitor accuses you of copyright infringement when your website looks a little too close to theirs or if they decide your latest ad campaign is libelous, rather than humorous. It may also be a safety net in the event you get hit with a copyright infringement claim from the "free" stock photos you thought you were in the clear to use — but really weren't.

Commercial Auto Insurance

Did you know that your car insurance isn't intended to cover your vehicle when you use it for business purposes?

If you are a photographer transporting your equipment on your way to a paid wedding gig and you get into a car accident, there's a chance your insurance company may not cover the resulting damage. Worse yet, you run the risk of having your existing auto coverage canceled completely if you're in an accident while engaging in business activities.

If you use your vehicle for business purposes or let employees use your car, you may need commercial auto coverage to protect you in the event of an accident.

Do you frequently visit or drive clients around in your vehicle? (Real estate agents, we're looking at you here.) You may need more coverage than your personal auto insurance policy will provide.

If you're running a business 100% out of your home office, on the other hand, and never use your car to visit clients, pick up goods or materials, or lend your car to an employee, then your personal auto coverage may be just fine.

But for those freelancers and solopreneurs who depend on their vehicles to get the job done, commercial auto insurance is a must-have.

Professional Liability Insurance

Some professional service providers run the real risk of causing monetary loss for their clients. Tax professionals, CPAs, investors, life insurance brokers, and accountants are a few examples of service providers who lend financial advice to clients.

But what if your client takes that advice and loses vast sums of money?

Professional liability insurance can help safeguard you against the high cost of legal fees if a client isn’t happy with your professional services.

And it's not just financial service providers who can benefit from this type of freelance insurance coverage.

Architects, contractors, website designers, and other service providers can also protect themselves against professional liability (also known as errors and omissions, or E&O) claims.

Professional liability is designed to protect freelancers and service providers from the risks of professional errors, including

• Making a mistake
• Delivering work late or incomplete
• Being negligent in performing work

If you get sued for the quality — or results of — your work, professional liability coverage can help you cover the costs of lawyers, legal fees, judgments, or settlements.

Cyber Liability Insurance

Cyber liability insurance may sound like coverage only needed for IT professionals and website developers, but the truth is that nearly every business can benefit from this commercial coverage.

Do you take customer identifying information, like names, addresses, phone numbers, credit card numbers, or social security numbers?

Do you perform any work on a laptop, tablet, or mobile device?

Have you ever "set up shop" in an airport, coffee shop, or anywhere else with an unsecured WI-FI network?

In a world where phishing attacks, data breaches, and stolen equipment have become the norm, cyber liability insurance could protect you against the high costs associated with a data breach.

According to a report by internet security firm Kaspersky Labs, the average cost of a small business data breach is $86,500.

Cyber liability coverage can help you pay for costs associated with a breach, including

• Notifying affected customers.
• Forensic services to determine how the breach occurred.
• Legal services to ensure regulatory compliance.
• Customer credit and fraud monitoring services.
• Business interruption expenses.

Get Affordable Insurance for Freelancers

If these insurance policies sound like they'd be out of reach for your small business, think again! Small business insurance coverage for freelancers, solopreneurs, and home-based businesses is more affordable than you’d think.

Let the business insurance professionals at Aegis Insurance Markets help you find the perfect amount of coverage for your individual business needs. We are an insurance brokerage, which means we shop through various insurance carriers and programs to find the best fit for your needs and budget.

We can also help create a customized coverage plan, combining different policies and coverage amounts to ensure you get the best freelance insurance possible at a price your business can afford.