Being your own boss offers freedom and flexibility, but it also comes with responsibility. As a freelancer, you are in charge of everything from client relationships to finances and insurance. Understanding what insurance coverage you need is crucial to protecting your business and reputation.
Business Insurance can be complicated, so we recommend working with an agent and educating yourself with these FAQs for freelancers.
Do I need business insurance, and if so what type of insurance do I need?
This question is covered in more depth here, but the short answer is yes. If you are a freelancer, you need to at least have General Liability insurance coverage in case you accidentally injure someone or damage their property.
If you have a building or equipment such as laptops, printers, desks, or chairs, (almost anything you use to operate your business), consider getting some form of property coverage as well. Traditionally, the best way to cover this type of property is using a Business Owners Policy (BOP) which has coverage for your business property and for General Liability.
You should also consider whether your business needs Miscellaneous Professional Liability insurance (MPL). Sometimes called Errors and Omissions Insurance, this can protect your business from wrongful acts and economic damages such as a failure to adhere to a contract or agreement, deliver a final product or service in a timely fashion, or provide accurate or correct advice, product, or service.
Does my homeowner’s insurance cover my business?
Probably not.
Homeowners insurance typically covers personal liability, not business activities. Some insurers offer limited endorsements for home based businesses, but these often fall short of what you need for full protection.
To properly safeguard your freelance business, consider purchasing a commercial General Liability policy or a Business Owners Policy (BOP). These provide broader protection for both business property and liability exposures.
💡 Pro tip: Always check with your insurance agent to confirm what your homeowner’s policy does or does not cover.
Why do my clients want to be listed as additional insured?
The short answer is to protect themselves. A company or client that you do business with may ask to be listed as an additional insured on the policy because they want to make sure that if you make a mistake, they are protected. Listing them as the additional insured on the policy extends the coverage to them so that they can file a claim if they are sued.
If your work leads to a claim, the client wants assurance that your insurance will help cover them too. Listing them as an additional insured extends your liability coverage to them, allowing them to file a claim if they are sued in connection with your work.
This endorsement usually comes with a small added cost since it increases the insurer’s exposure. Your agent can issue a Certificate of Insurance (COI) as proof of this status when neede
How expensive is business insurance?
Well, like many things, it depends. The premium that you pay directly corresponds to how risky the insurance company thinks your business is.
Rates are based on several factors, but there are three primary drivers.
1. What. Insurance companies first look at what it is that you do. What type of business or service do you provide? What type of clients do you work with? Some business types are riskier than others, so depending on what type of work you do, the insurance company could charge you a higher or lower premium.
2. Where. The next thing they look at is where do you do your work? Some states, cities, and zip codes are riskier to insurance companies than others. For example, if you work in a more densely populated area, the claim rate is probably higher. So, depending on where you live and work, your premiums could be higher or lower.
3. How. The insurance company will also consider how large your operation is. How many years have you been in business? How many claims have you had? Do you have employees? If you are a company that is bringing in millions of dollars’ worth of revenue, with multiple employees and working with many clients in a year, you will be charged more than a one-person operation. In most cases, the longer you have been in business, the more attractive you are to an insurance company, which means lower rates.
Protect your freelance business with confidence
As a freelancer, securing the right insurance coverage is not just a formality. It is a smart business move. By working with an insurance agent and understanding your coverage options, you can protect your livelihood and focus on what you do best: running your business.
🔍 Need help finding the right coverage? Find an Agent to get started with a personalized business insurance quote from Coterie.