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How to Get Self-Employed Business Insurance

5-minute read

A self-employed photographer looks at a photo she just took.
Mariah Bliss

Mariah Bliss

30 June 2020

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A year ago, I started to wonder, what if a client were to sue me? As a freelance writer, I hadn’t set up my business as an LLC, meaning my business and personal assets were equally at risk. Yes, that means typically my home, car, and other belongings could be taken away under certain circumstances.

The thought was paralyzing.

Right away, I started investigating self-employed business insurance policies. I knew I needed coverage in the event of a lawsuit — and I needed it fast. I also learned that nearly 43% of small business owners polled in the United States have faced lawsuits or have been threatened with one.

Unfortunately, the odds weren’t in my favor, even if I did everything right.

The first step? Find the best business insurance policies for self-employed workers. So I did a bit of research and learned quite a bit. Here’s what I found.

The Two Business Insurance Policies Self-Employed People May Need

General liability (GL) insurance.

If you visit customer sites or work in a home office where clients meet with you, you should consider getting general liability insurance. This policy can help protect you financially if a client or vendor gets injured or suffers damage to their property while meeting with you.

Imagine this scenario. Let’s say you’re a freelance web designer who invites a client to your home to review a project. During the visit, your customer trips and falls on the ice on your front walkway, resulting in a trip to the emergency room for a broken ankle. Without general liability insurance, you may be on the hook to pay for your client’s medical bills and rehabilitation.

Trust me, this adds up. The average claim for a client injury is $30,000!

Fortunately, general liability insurance can help protect you. Remember, without insurance, you may have to pay for damage out of your own pocket. And if your business isn’t a Limited Liability Company (LLC), your personal assets may be at risk too.

Lesson learned? It’s a good idea to get GL insurance if you meet with clients on their property or on yours.

Professional liability (PL) insurance.

Most self-employed workers likely need professional liability insurance too. This policy is especially important if you provide services where you can inadvertently make a mistake. Think: accountants, bookkeepers, writers, designers, project managers, and others.

Let’s face it. None of us are perfect. A mistake can happen to anyone, no matter how good you are at your job. And even if it’s not your fault, a client can still accuse you of negligence, and if that happens, you’d most likely need to hire a lawyer to represent you.

Here’s an example. Let’s say you’re a marketing consultant who creates a strategy for a large brand. After executing the strategy, your client claims the company lost a significant amount of money in brand equity — directly due to your recommendations. Suddenly, you face a lawsuit and need to defend yourself for the amount of money in their lost revenue.

Even if it’s not your fault, you’d typically need to hire a lawyer to defend you.

Professional liability insurance also can potentially cover you if you’re hit with a claim involving libel, slander, copyright infringement, and much more. These claims are expensive and can be enough to put some self-employed workers out of business.

It’s a good idea to get PL insurance right away, before you start working with clients. And if you’re reluctant regarding the expense, remember: the costs of a lawsuit are far greater than insurance premiums!

What Does Self-Employed Business Insurance Cost?

While we believe insurance is a smart idea for any business, we also know your business isn’t just any business. That’s why we customize coverage to make sure you’re covered the way you need to be. So your cost will depend on a number of considerations, such as:

  • Payroll estimates
  • Your business location
  • Services offered
  • And more

We work with leading national insurers to find you a choice of coverages and prices. In fact, we can find general lliability policies as low as $22.50/mo.*

To find out how much your business insurance may cost, check out our handy online quote tool.

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What Steps do I Need to Take to Get Self-Employed Insurance?

Once you’ve decided you need insurance, make sure you get the right policy for your business. Fortunately, Simply Business can help. We have an online quote form that asks quick questions to help show policies you may need — and the amount of coverage that is worth considering for your business.

But even if you don’t choose Simply Business, here are a few tips to help you assess the coverage you may need.

1. Assess all of your risks.

Take a quick inventory of your business and write down factors that can influence your risk for getting sued. Some questions to ask:

  • Do I work at home or visit client sites?
  • Do I meet with clients in my home or another office?
  • Do I participate in physical work?
  • Could my work ever hurt a client or vendor? Or make them sick?
  • Do I offer services where mistakes can easily occur?
  • How much revenue does my business generate?
  • Are lawsuits common in my industry?
  • Do I create content or marketing campaigns where I could be accused of copyright infringement?
  • Do I work with expensive equipment or other property? How about my clients’ property?

Look carefully at your business from all angles. Chances are, no matter your industry, you likely need insurance because there’s some level of risk. Asking these questions can help you discover the type of risks you may face.

2. Make a list of your business inventory and equipment.

As a business owner, you potentially have a lot to lose. Depending on what you do, property damage can cost thousands of dollars or more. Think of everything you own and what it may cost to replace those items.

Consider everything you work with, including:

  • Software
  • Computers
  • Office space
  • Equipment (for example, cameras and lighting equipment if you’re a photographer)
  • Proprietary information and digital files
  • Machinery, tools, and other supplies

If you invite clients into your workspace, consider their property and equipment too. Anything can happen while they visit — and you may be on the hook to pay for any damages that may occur.

3. Don’t make assumptions.

If you work at home and think your homeowners insurance will protect you, think again. The truth is, most homeowners policies don’t offer coverage for small businesses working out of the home.

Not only should you check with your home insurer first, but you should probably get business insurance anyway. You don’t want to face an unexpected claim thinking you have coverage, only to find out you don’t.

4. Talk to other self-employed workers in your industry.

Make friends with your competitors. This is one situation where you can benefit from their expertise, if they’re willing to talk. Chances are, people who have worked in your industry for a while already have appropriate coverage. Or they may offer wise advice on getting a policy for the best price.

You’ll want to ask:

  • Have you ever faced a lawsuit or other claim?
  • If so, did you have coverage? Did it work for you?
  • What types of policies did you consider ?
  • How much coverage do you have and why?

5. Shop around for quotes!

These days, it’s very easy to get free quotes online — and within minutes. In fact, Simply Business has an online quote form that takes just 10 minutes to complete. Once you answer a few quick questions about your business, our licensed agents can help you view policies and coverage levels that could work for you.

Shopping around and comparing self-employed business insurance policies is a great idea. It can help you see what’s available, budget accordingly, and purchase an affordable plan. Plus, with Simply Business, it’s free to get insurance quotes. So what are you waiting for? Get started now.

*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on October - December 2021 data of 10% of our total policies sold.

Mariah Bliss

Written by

Mariah Bliss

I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!

Mariah writes on a number of topics such as small business planning, contractor insurance, and business licenses.

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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