Do I need insurance to do freelance work?

Imagine you’re a freelance videographer hired to shoot a summer wedding at a beautiful location along the Wisconsin River. It’s a bit of a drive, so along the way you stop at a convenience store to refuel your car and grab a snack. Your equipment is in plain view in the back seat but it’s a rural area, so you don’t think anything of it.

You return to find a window broken and video equipment missing. Once you get past the shock, you feel panicked thinking about how you’ll replace the equipment and whether you’ll be sued by the newlyweds.

And you regret not having insurance.

As a freelancer, protecting your business is necessary. This blog looks at the need of insurance for freelancers, the types of insurance that are relevant, and the advantages of having freelance business insurance.

Why insurance for freelancers is crucial

More people are choosing freelance careers over traditional employment. A recent study shows a majority of American workers will be doing some sort of freelance work by 2027.

Freelancing is attractive because it gives you the freedom to be your own boss and choose who you work with. However, it comes with new responsibilities, including securing business insurance. Here’s why it’s important:

Protection from liability claims: Liability insurance guards you against potential lawsuits and covers legal expenses if a client alleges your work caused them harm.

Coverage for property damage: Property insurance covers damage or loss to your property, such as equipment or workspace, depending on the nature of your freelance work.

Defense against client disputes: Business insurance helps in handling certain client disputes, offering coverage for legal fees, mediation costs, and potential settlements.

Four coverages a freelancer should have

There are four types of insurance that freelancers, like our videographer, should have to protect themselves and their business:

Business liability: If you become legally obligated to pay due to bodily injury or property damage, this coverage protects you.

Personal and advertising injury: This provides protection for claims arising from:

  • Libel
  • Slander or defamation of character
  • Violation of right of privacy
  • Piracy or unfair competition
  • Infringement of copyrights, titles, or slogans.

Cyber coverage: This helps cover the costs associated with data breaches, cyberattacks, and other cyber incidents. It includes expenses like legal fees, customer notifications, crisis management, and financial losses from business interruption.

Business income and extra expenses: This provides coverage for loss of business income due to the necessary suspension of operations because of covered physical damage.

Rural Mutual Insurance offers a Businessowners Policy that includes all the basic coverages needed for most freelancers, including liability, property insurance, business income, and personal and advertising injury.

Additional insurance a freelancer should consider

The above examples might cover a lot, but they don’t cover everything. Here’s a handful of other coverages to consider to fill potential coverage gaps:

Interruption of computer operations: This is an extension of business income and extra expense coverage. It covers a suspension of operations caused by an interruption of computer operations due to destruction or corruption of electronic data.

Electronic data: This covers costs to replace or restore data which has been destroyed or corrupted by a covered loss.

Money and securities: This provides coverage for loss due to theft, disappearance or destruction, of money and securities used in your business while at a bank, within your home, or in transit between these places.

Scheduled property floater endorsement: This protects your specified, high-value business personal property (like video cameras) while located anywhere within your coverage territory.

Worker’s compensation insurance: Depending on your work nature, you may need this insurance, which provides coverage if you suffer an injury or illness while working. Check the Wisconsin Department of Workforce Development to determine your need for this insurance.

Budgeting for freelancer insurance

Several factors influence the cost of business insurance for freelancers, including your industry, the nature of your work, coverage level, claims history, and location in Wisconsin.

When budgeting for insurance expenses, consider your financial situation and coverage needs. Meet with a local agent who can customize your quote based on your unique role as a freelancer.

Choosing the right provider

Finding a reliable insurance company that caters to Wisconsin freelancers involves a little homework. Here are two things you should do:

  1. Look up insurance companies that specialize in business insurance. We’re biased, but it’s worth mentioning Rural Mutual Insurance is a top three business insurance writer in Wisconsin.
  2. Talk to a local agent in your community for expert guidance and to help you understand the fine print of business insurance policies.

The benefits of freelancer insurance

Freelance business insurance offers benefits beyond the policy:

  • It helps meet client requirements and contracts. Many clients and companies require freelancers to have insurance coverage before considering them for projects.
  • It elevates your professional credibility, making you a more attractive choice for potential clients.
  • It gives you peace of mind. Going out on your own can be scary – having a safety net eliminates those fears.

The unexpected can happen anytime, anywhere, and to anyone – including freelancers. Whether you’re a freelance videographer in Madison or a solo web designer in Wausau, you’ll feel better if you’re protected.

Learn more about freelance business coverage by reaching out to your local Rural Mutual agent.

Coverages mentioned in this blog are subject to various terms and conditions. Be sure to review any policies to make sure you understand your coverage.