Freelancers Liability Insurance: What You Need to Know

Being a freelancer is a lot like being a cowboy in the wild west.  You have all of the freedom and flexibility to roam where you want to. You don't have to answer to anyone, you can decide which projects to take and you get paid well for the work that you do. On the other hand, when something goes wrong it lands on you, whether you are at fault or not.

Which Freelancers Need Insurance Coverage?

Among the types of freelance businesses that should have liability insurance are web designers, graphic designers, programmers and photographers. Any business that provides a service or gives advice would benefit from the peace of mind that liability insurance offers. Whether you’re a Mompreneur, who wants more time with the kids or just someone who prefers to make their own schedule, freelancing can be a great way to make a living. But you need to know how to protect your business.

How Professional Liability Insurance protects freelancers

One way that freelancers can protect themselves if something goes wrong is with a professional liability insurance policy. Professional liability insurance, sometimes called error and omissions or E&O coverage, can protect you against claims that you  incorrectly provided a contracted service or that the work you did was faulty in some way.

Freelancer Professional Liability claim example

A freelance graphic designer took a project that included the design of a logo for a start-up technology company. The designer submitted several designs for the client to choose from. The client requested that elements of two different proposed designs be combined into the final logo. The designer didn't realize it, but the final design bore a striking resemblance to the logo of another company in the technology space. The established company sued the start-up for copyright infringement, and the start-up sued the designer. A professional liability policy could have covered the designer for the cost to defend against the suit as well as any settlement or judgement.

How General Liability Insurance protects freelancers

In addition to professional liability insurance, freelancers should consider general liability insurance. A general liability policy covers property damage or bodily injury to someone else. If you meet with clients in your office, or if you go to a client’s office or job site, a general liability policy will protect you if a client slips and falls on your icy side walk, for example, or if someone trips and falls over your laptop bag while you’re at a client site.

How General Liability Insurance can cover your equipment

Freelancers, perhaps better than anyone, know that they are only as good as their equipment. If your freelance business includes equipment such as computers, printers, copiers and so forth, a business owner's insurance policy combines general liability coverage with coverage for these items.

For example, You are finishing up a long day of photographing your client's conference. As you are loading your camera bag into your car, it slips out of your hand and hits the pavement. You open your bag to find that your 70-200mm lens and your portable hard drive are damaged. When you get home you discover that you can't even pull your photos off the hard drive. Your Hiscox Business Owners Policy could provide coverage for your damaged lens and hard drive and help cover the cost to recover your data from the damaged drive.

This post was originally published in 2015, and was updated on 7/16/2018 to provide updated claim examples and further additional content regarding freelancer insurance.