There are lots of types of insurance. This includes the typical things, like car insurance and homeowners insurance. But it also includes a whole host of other insurance, from business insurance to body part insurance.
For many folks, the only thought they give business insurance is when they need to sign a waiver, like saying you won't sue the gym if you hurt yourself on the treadmill. But corporate gym chains are hardly the only businesses that need insurance.
Indeed, even self-employed freelancers could be asking for trouble by not having the right insurance. From consulting liability to equipment theft, freelancers can be subject to all manner of financial risks to their small businesses. The right insurance could save you thousands in the event the worst happens.
Types of insurance for freelancers
Your insurance needs are simpler when you don't have employees, and even simpler still if you work remotely. That said, you may still need one or more of the following types of insurance coverage.
General liability insurance
This is the broadest type of coverage, and it applies to third-party claims of bodily injury, property damage, or personal and/or advertising injury. For example, if you were sued for libel or if someone tripped and fell in your home office. According to Progressive, the median cost of a general liability policy was $53 a month.
Professional liability insurance
We all make mistakes, but some of those mistakes cost more than others. This type of insurance covers you in the event that a professional mistake or oversight causes a client to lose money. You may hear this type of insurance referred to as Errors and Omissions (E&O) insurance. The median cost of a professional liability policy is around $42.
Commercial auto insurance
There's a fine line between a car you use to drive to work — and one you drive for work. If you stray over the line, your regular car insurance policy may not cover everything (or, in the worst case scenario, anything). Commercial auto insurance policies will cover your on-the-clock driving. In some cases, you may be able to simply add a rideshare addendum to your existing policy. Commercial auto insurance policies typically run about $600 to $2,400 a year.
Commercial property insurance
Being a freelancer often means accumulating a lot of gear and equipment you pay for yourself. You may even purchase storage or studio space. When used for business, this property won't fall under most personal insurance policies, which is when commercial property insurance becomes necessary. Small businesses can expect to pay around $67 a month, though the amount of coverage will impact your rate.
Business owner's policy
A business owner's policy is basically an insurance bundle that combines general liability insurance with commercial property insurance. Some insurance companies will offer it at a lower cost than the individual policies.
Data breaches are more common than ever. If you store sensitive client or customer information, you may be liable in the event of a data breach. This insurance helps cover the costs of informing customers and investigating the breach.
Home-based business insurance
Your general homeowners policy may cover your home office as part of your house, but it may not cover everything it contains. If you have expensive equipment or inventory in your home, it may be worth looking into a separate policy or addendum.
Don't forget health insurance, too
Although the focus of this list article has been business insurances, it's worth mentioning that you should definitely have some kind of health insurance, too. This can be a little harder than when your employer picks your policy — and more expensive — but there are ways to save. One good place to start is the HealthCare.gov portal.
Deciding whether you need insurance is always a matter of your personal risk tolerance. Insurance has always been about “just in case.” Not everyone needs insurance; more people still don't care to bother with it. But if you find value in peace of mind, it's definitely worth consideration.
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