Do Freelancers Really Need Business Insurance?

In the growing freelance economy, it seems as if the sole proprietor has gained superhero status—impervious to traditional business woes because of their agility and nimble business model. However, the stories we read to get us going as entrepreneurs, don’t always shed ample light on the facts of business: accidents happen. And when they do, insurance is the best way to avoid becoming a statistic.

Why would I need insurance as a freelancer?

If you are making money from an activity, you can’t claim personal insurance if an accident were to occur. This means your home owners insurance, health insurance, and automotive insurance might not be robust enough to cover a work-related claim. By investing in business insurance for your entrepreneurship, you can ensure any event will be covered.

Here’s three good reasons to have your freelancing insured:

1. It’s cheaper: Beyond ensuring coverage, however, the insurance you hold for your small business can free up capital for future business investments. Instead of needing to have cash reserves on-hand for if your computer gets stolen, you only need to have enough to meet your deductible.
2. It’s an investment: as a savvy entrepreneur, you understand how investing in your business can be like creating your own fate. The same holds true for insurance. The premiums pay into an asset that is worth ten times the amount you pay.
3. It’s tailor fit: if you go with a small, online provider like SMB Insurance, you can get coverage plans that match your specific needs—growing as your business grows.

But aren’t I covered by my contracted position?

The short answer is no. If you’ve adopted the freelancer mentality across multiple businesses, you can’t be certain every business will have coverage for you while you’re at their location. Having your own insurance not only makes your transition from business to business easier, it also makes you more desirable as a contractor.

When you seek to be hired as a contractor, bringing your own insurance to the table shows you are a professional who is willing to invest in your own “business” of freelancing. This sets the proper tone for negotiating rates, duration, and even additional perks that you might want during your tenure with that client. Not to mention, it is far easier to have your claims handled when you are the policy owner.

The last reason you can’t rely on your position to handle your insurance is that it might be limited in what it can provide coverage for. Whether a deductible limit that is outside of your means, or a pay out that doesn’t quite cover your losses, depending on another person to insure you can be asking for trouble.

Do I still need insurance if I contract from home?

Home-based contractors and freelancers are perhaps the most vulnerable when it comes to insurance claims. Being that you’re off-site, there is no reason a business would extend its insurance to cover you. Add to that the fact that many work-related events are disqualified by most personal insurance plans, and you have the perfect recipe to be out of luck.

Purchasing business insurance for your freelancing is an investment in your small business that will help give your work from home a firm foundation. Not only in your own mind—as the investor you will place more importance on it—but it also bolsters your finances. For instance, you can claim business insurance on your taxes, work the premium into your budgets, and leverage its value for more aggressive business moves.

But who will cover my transient insurance needs?

Clearly the name of the game with a freelancing economy is agility. This can create headaches for larger insurance companies since their model is to serve exclusive coverage options. Having a variety of needs that might have in your contracting roles, you will want to work with a nimble insurer who can find specific plans to meet your exacting needs.

As fate would have it, there has been a type of insurance company that follows the same model as you. Small, online insurance companies can stay nimble by accessing specific plans, lowering overhead through digital applications, and offer better service since their business model is built around small businesses and freelancers.

You may think you’re limited as a freelancer, but with this new economy gaining popularity, options are growing. Reach out to SMB Insurance today to see what ridiculously easy business insurance looks like.

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This post was written by SMB Insurance