Insurance for Freelancers: 7 Reasons Not to Risk Going Without Coverage Blog | Insurance for Freelancers: 7 Reasons Not to Risk Going Without Coverage
Consultants 10/27/21

Insurance for Freelancers: 7 Reasons Not to Risk Going Without Coverage

No matter what the field, freelancing can be a difficult business. Often one-man operations, these small businesses have to rely on good word of mouth as well as top-notch service, all while having a fraction of the budget of larger competitors. Insurance for freelancers on top of all that can feel unnecessary. Here are seven big reasons why it’s not.

7 Reasons Not to Risk Going Without Coverage

1. It Could Be Required

Some business is too sensitive not to have a backup plan and customers know it. Some will walk away from a deal if there is no mention of insurance in the contract. Customers want to know that they are going to be protected if the work relationship doesn’t go as planned, and also that the consultant has a bar that their work must reach or surpass.

Because of this, some customers will not do business with an uninsured consultant. Purchasing insurance not only protects you but also your customers. That protection attracts clients and helps a small business grow.

2. Helps Your Customers

If a small business doesn’t have the money to cover a customer’s damaged property, then a customer might not have the finances either, leaving the damage unrepaired and your client out to dry, which could be detrimental to your business relationship. Accidents happen, and a general liability policy follows you where you work. If you are with a client and accidentally damage their property, your policy will take care of you. A good policy keeps both parties covered, and pays for damage the client might otherwise have to pay for out of pocket.

3. Adds Legitimacy to Your Small Business

It’s important to strike the right first impression as a small business. Being seen as too small or underdeveloped can scare people away that might have signed with a consultant otherwise. Showing potential customers proof of insurance and what it covers adds a sense of legitimacy to a one-man consulting firm.

Including insurance as part of your business plan shows a customer you are able and willing to defend your work. And it adds a layer of security to their minds, telling them you know your part of the deal and you’ll work hard to meet their expectations.

4. Less Expensive in the Long Run

Insurance can be pricy, and when a business has small profit margins, it may also feel like a luxury the owner can’t afford. But what about when the worst happens and a consultant is sued for sub-par work or the customer is not satisfied? Courts can mandate costs if a business is found at fault, and even if the charge is dismissed, attorneys still need to be paid.

Professional and general liability insurance can help cover these expensive costs. A general policy handles third-party accidents or damages to property of others (clients), while a professional policy protects the consultant’s work and performance. If it is delivered late or the customer declares it wasn’t done properly, professional liability insurance can help freelancers defend their work in court.

5. Legal Help When You Need It

On a similar note, general and professional liability help to pay attorneys when a consultant is called into court to argue claims. Dealing with the law and accusations is overwhelming, so a good attorney not only defends you but is a much-needed helping hand during hard times. Your insurance policy can help consultants cover attorney fees.

And if payment is required to repair damages, your policy can help cover them as well. Being sued by a customer is a bad day. Being sued and having to fight it alone is an unending string of bad days and extreme financial burden, one you can avoid by having the right insurance policy.

6. You Have Help When Things Get Out of Hand

Consultants have to collect their client’s information to do business and tailor their services to each individual, so that information has to be protected. But there are also thieves. If data is stolen, cyber security insurance can help a consultant inform their clients of the breach, even going so far in cases to help return any stolen identities.

And now those faulty or broken data collection systems have to be repaired or replaced as well. Cyber security policies help the business owner fix broken systems so they can start repairing their relationships with customers instead.

7. It Keeps Your Credibility Intact

Stolen data, damaged property, and making customers pay rather than the business fixing its own mistake all damage a freelancer’s reputation, and nothing is more important to their business. It takes time to repair a reputation, if it can be repaired at all. Including insurance in the business plan shows which consultants look forward to the future and which do not try to shield themselves and their customers from unexpected problems.

Freelancers have to know contracts, time management, and office skills all on top of their actual craft. Having insurance helps ensure that all their hard work isn’t wasted or destroyed by one little mistake or unpredictable accident.

At NOW Insurance we provide policies that are simple, fast and affordable. We want to make it easy for small business owners and sole proprietors to focus on their craft and leave the details to us. Our policies are tailored to your situation, so you get the coverage you need and don’t pay for extras.

Contact us with any questions or to learn more about insurance for consultants.

Get a quick and easy online quote in under 3 minutes.

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