Business November 19, 2018 Last updated November 19th, 2018 2,165 Reads share

The Complete Guide to Insurance for Freelancers

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Starting out as a freelancer is a fun and exciting rush. All the gear you need is shiny, brand-new, and ready to go.

Why do You Need to Get Insurance?

The truth is, no matter how well you earn, as a freelancer you won’t have many of the perks regular employees do. One of those perks, though we don’t always realize it, is insurance.

This complete guide to insurance for freelancers will help you navigate what you might need to keep you, your family, and your business safe.

Costs of Health Insurance for Freelancers

Let’s start with the basics. Nothing gets more basic than health insurance. As a freelancer, you are your own best asset. No one else, can do what you do. Every leave you take is unpaid. Bottom line? Go for health insurance first thing.

First things first: Know the type of health insurance you need.

There are many different types of health insurance. Knowing what to get and where to start is not easy. The best place to start is to see what is offered in your state. For example: Live in Pennsylvania? Simply start by doing an online search for health insurance to see that, you have the following options:

  • Receiving health insurance through an employer (as a freelancer, it would most likely be a spouse’s employer)
  • Applying directly with a private health insurer
  • Applying for subsidies based on your income, age, and household size
  • Insuring only your children with the Children’s Health Insurance Program
  • Seeing if you qualify for Medicare or Medicaid

Knowing which one of these you’re trying to enroll in goes a long way to ensuring you are covered when it comes to your health.

Know your privileges: Use special enrollment

If you were employed before you decided to assert your independence as a freelancer, check first with your company’s health insurance provider or HMO (Health Maintenance Organization) about health insurance. Depending on your state or your company or your coverage, the open season for enrollment is a few short months.

Usually, there is a special enrollment period where you can enroll out of open season. Often, this is good for 60 days after your end date with the company. Better not to wait for open season.

Know your options: The Affordable Care Act

If you are looking for other health insurance options, you may find a health insurance provider under the Affordable Care Act (Obamacare). Usually, it’s pretty hard to find a health insurance provider who will cover you if you have certain preexisting conditions, such as asthma or diabetes. A higher-risk disease often makes us higher-risk clients.

Under the Affordable Care Act, health insurers only need your age and your smoking background to provide insurance for you. This goes for your family as well. Depending on your income, you may even be eligible for financial subsidies through the Act.

Know your opportunities: Financial assistance

If you would rather go with a private health care organization, there are some that offer financial subsidies based on your income level, age, and the size of your household. It’s better not to miss an opportunity to save on health care; it literally might save your life.

Know your additional needs: Cover every base

Sometimes, a health insurance plan is so thorough it covers your dental, disability, and life insurance needs. However f it doesn’t, it’s a good idea to look into getting insurance for these. Dental needs never go away. If you travel a lot on two wheels, you might decide disability insurance should be high on your list; and life insurance is your way of making sure your family will be provided for no matter what.

After making sure you’ve secured your best asset–yourself–take a close look at the other kinds of insurance plans that could protect your livelihood.

Liability Insurance for Freelancers

Many kinds of insurance required by freelancers fall under liability insurance. (Funny, isn’t it?). It’s important to choose what’s best for your business.

What is liability insurance?

In the same way that health insurance covers costs incurred by sicknesses, liability insurance covers expenses incurred by legal claims concerning your property, personnel, or products (see what we did there?).

Let’s look at the different kinds of liability insurance you might want for your business.

Product liability insurance

If your business is related to manufacturing products for sale, you might want to consider this. If your product is somehow caught up in or related to any injury or (knock on wood) death, and legal claims are brought to your door, you will have the means to defend yourself.

Indemnity insurance

Indemnity insurance is a bit hard to define, but that’s because it’s supposed to cover you for legal claims that are equally hard to define. For example, you are a freelancing private tutor. You tutor the student in math, but he or she still fails the final exams. Should the parents, legal guardians, or school decide to lay down a legal claim for your head, you can draw upon your indemnity insurance to cover legal fees, settlement claims, and all that jazz.

Media liability insurance

Does your business have a Facebook page or a website that promotes its products? There is a light but scary possibility that you may announce something (or forget to publish something) that causes distress or injury to a customer. To cover legal fees related to claims of slander or making misleading or false statements, media liability insurance can be included in your plan.

Umbrella liability policy

Apparently, umbrellas can save us from rain, snow, and losses due to catastrophic events (usually referred to as “acts of God”). From movies or experience, we know that natural disasters are the best destroyers of property and insurance plans. Insurance companies shy away from covering those kinds of losses, just because they can both unpredictable and devastating. That’s fair. And that’s also why umbrella liability policies were designed just for those kinds of events. Depending on where you live, you may want to get this kind of insurance.

Business Interruption Insurance for Freelancers

Not under liability insurance, but related to it, is business interruption insurance. It pays for any loss of business income you incur while getting back on your feet after a natural disaster or related event stops your business from running.

Now let’s look at the other kinds of insurance you might want to get.

Home or Contents Insurance for Freelancers

If your home is your main base of operations, it’s probably wise to get a home insurance plan. But if that’s a bit too general for you, or you move around a lot, you might want to opt for contents insurance, which covers very specific things like your laptop or sewing machine.

Auto Insurance

If you make a number of house-to-house calls, or your livelihood is absolutely tied to your car, auto insurance should probably be part of your package. Engine trouble and flat tires hit the best of us at the worst of times, and insurance is there for exactly that reason–to cover for what we can’t anticipate.

The Complete Guide to Insurance for Freelancers

The idea is not to get absolutely everything–that might be more than your business can handle. It’s getting just the right package of insurance that will cover you for the most likely challenges you will face as a self-employed individual.

Thinking about growing your practice from a freelance shop to a small business, check out 7 Types of Insurance You Need for Your Business.

young freelancers – deposit photos

Grant Oster

Grant Oster

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