Freelancers Insurance – Cost and Types Of Policies

Whenever you budget the expenses of your business, Freelancers insurance must be near the top of the list because you can’t always know exactly what is going to happen in the future.

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With the protection provided by general insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your Freelancers enterprise, you must consider how much financial danger you are taking on.

Business Insurance for Freelancers

If your Freelancers business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for small businesses to outline what the main kinds of insurance that you need are, and where we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Freelancers business?

What this means, for any Freelancers business owner, is that if some person claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Freelancers business is not harbored by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have claimed.

When you are running your Freelancers operations, you can’t avoid responsibility for the results of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as a limited liability company, all of that liability belongs to you as an individual.

What does Freelancers insurance protect you from?

For your Freelancers business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

As well there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any Freelancers business owner should remember when negotiating the insurance needed.

The main types of insurance for your Freelancers businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Freelancers business is dealing directly with customers, and that means you always have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can sue you for compensation.

General liability insurance policy for your Freelancers business insures you against claims coming from injury to visitors or damage to their property.

It protects your Freelancers business from the claims themselves and also to any resulting court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts demand proper liability insurance.

The normal level of general liability insurance for your Freelancers business would be with a cap of $1 million for a single claim and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Freelancers insurance operations.

Professional liability insurance for your Freelancers business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Freelancers business for them, you can quickly be involved in a law suit.

Even if the matter against you is ruled in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Most small Freelancers business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of Freelancers insurance section below for average prices of professional liability insurance for your Freelancers operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that what they received didn’t meet your description of function, or that your guidance was basically incorrect.

You need to know the explicit laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for injuries caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for Freelancers

Only you can estimate exactly how much insurance you must have.

Best advice is to contact experienced insurance agents, brokers or company representatives for guidance.

Commercial insurance

Commercial vehicle insurance for your Freelancers business

Be careful! – most policies for private vehicle insurance do not cover any happening like theft or accidental damage when the car is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial truck policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the truck itself, the content and any legal bills, medical expenses, and property damage is covered if your car is involved in an accident.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The necessary value of the insurance depends on the depreciated value of the vehicle, and your intended level of cover of contents. 

Tools and Equipment insurance

Since your Freelancers business needs specific and expensive equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy whatever needed to keep your Freelancers business running.

It is hard to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your Freelancers business’ equipment.

Commercial Property insurance

Any Freelancers business that owns or rents space in a building needs a commercial property insurance policy.

If you own the property, you probably have a substantial capital investment, along with a big liability if there’s a mortgage.

Every physical building location must carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Freelancers business deals in areas of high risk, like Florida or South Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Rhode Island, where unlimited cold snaps can cause damage to outer coverings of Freelancers business premises, there is a need for more additional cover than in warmer climes.

Although the level of cover depends completely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Freelancers insurance section below to give some estimate of the average prices per million dollars of property insurance for your Freelancers business.

Temporary insurance by month, week or day for your Freelancers business

Is your Freelancers business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Freelancers – are special policies where you can cover a specific period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having the same risk cover.

The important feature of short-term insurance is that you buy the cover for a defined period – a specific date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy (BOP) for your Freelancers business

You have the choice to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP merges commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized Freelancers businesses, such as yours.

There are some limits that will determine whether BOP is suitable for your own business.

BOPs do not cover your professional liability or commercial vehicle risks.

Also, the size of your business will rule whether you are permitted to take out BOP cover.

The typical business that is eligible for a BOP policy must have no more than one hundred employees, and maximum five million dollars in annual sales.

As well, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Freelancers business employees

In most states, it is mandatory to have workers compensation insurance when your Freelancers business has one or more employees.

Workers compensation insurance covers the enterprise against any costs that arise if an employee experiences an injury or becomes sick as a result of work.

The benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you can’t take out your workers compensation obligations from private insurance companies.

Workers compensation rates are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must consult the relevant authorities in your state.

Average costs of these types of insurance

Although every Freelancers insurance need is unique, there are enough examples of average quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an agent what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your Freelancers businesses needs.

Types of insurance Price range
General liability insurance $755 – $920
Public liability insurance $385 – $740
Equipment insurance $315 – $1150
Commercial insurance $1015 – $2015
Product liability insurance $275 – $710
Commercial vehicle insurance $1705 – $2505

Cost of insurance for your Freelancers operations depends on many different factors.

We have reckoned these figures for small independent Freelancers businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, but in smaller states like Utah, they usually are about 20%-30% lower.

The location and size and type of your Freelancers business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Freelancers operations?

This is a wide term used to describe common insurance policies designed to protect Freelancers business owners from risks like bodily injury, property damage, claims of negligence.

Does my Freelancers business have to have insurance?

Some of the kinds of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.

Some other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Freelancers business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Freelancers insurance.

How much will Freelancers business insurance cost?

In addition to the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for Freelancers, in the search box below, and follow the relevant links.

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