Do I need general liability insurance as a freelancer?

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Do I need general liability insurance as a freelancer?

General liability insurance is one of the first types of business insurance that self-employed people get. 62% of small businesses have this coverage — and for good reason. Whether you’re a designer, writer, consultant, developer or any other type of freelance worker, general liability coverage could help protect your freelance business from some of the most common cost risks of working for yourself, ERGO NEXT reports.

It could help cover costs If a client or someone else claims you caused:

• Bodily injury: When someone who isn’t an employee (like a client or a visitor) gets hurt at your workplace.
• Property damage: If you accidentally damage someone else’s property.
• Personal and advertising injury: If your business is accused of defamation, copyright infringement or using another brand’s content without permission in your ads.

General liability coverage could help you cover medical bills, repairs or replacements, legal fees, defense costs and settlements. Imagine if:

• You accidentally fry a client’s laptop with spilled coffee and they ask you to replace it.
• A client breaks a leg tripping over your cord and asks you to cover their medical bills.
• You accidentally break expensive artwork while working on-site and you’re asked to replace it.
• You need to defend yourself against a legal claim because you’re accused of using an unlicensed image in your advertising.

Do freelancers need General Liability insurance?

Yes — and in some cases it’s required. Some clients and agencies require proof of liability insurance coverage before they’ll sign a contract with you. Even if it’s not a requirement, a certificate of insurance (COI) can help you look more credible and win new business.

Whether you’re an independent contractor, gig worker or self-employed professional, general liability insurance could help protect your finances and reputation from unexpected costs. Even if you primarily work remotely, everyday situations can lead to claims.

Freelancers are a major part of the U.S. economy, generating about $1.27 trillion in annual earnings in 2023. But liability insurance coverage hasn’t caught up. One ERGO NEXT survey found that 90% of small business owners aren’t confident their coverage is adequate — meaning many freelancers may be more exposed to financial risk than they realize.

For instance, in one ERGO NEXT claim, a freelance videographer was filming a property for a real estate client and accidentally broke a piece of furniture. Their general liability insurance helped cover the repair costs — turning what could’ve been an awkward, expensive mistake into a simple fix.

How much does General Liability insurance for freelancers cost?

General liability insurance costs for freelance workers depend on several factors, including:

• The kind of work you do
• Your industry
• How long you’ve been in business
• Your location
• Coverage limits
• Claims history

Every freelance business is different, and so are insurance rates. Coverage and costs can vary by state and industry, so it’s always best to review policy details before you buy.

Which types of freelancers need General Liability insurance the most?

Some freelancers face higher risks than others — especially those who meet clients in person, work on-site or use specialized equipment.

Here are some ways that general liability insurance can help protect different kinds of freelance services:

• Freelance photographer: You accidentally damage a client’s venue or furniture during a shoot.
• Freelance graphic designer: A copyright holder claims you used an image or design that resembles their copyrighted work in your advertisement.
• Freelance web developer: You’re accused of posting or sharing content that hurts the reputation of another business.
• Freelance writer or marketer: You publish promotional copy that’s a little too similar to another company’s content.
• Freelance event planner: At an event, a guest trips over your cables or display and seeks coverage for their medical bills.
• Freelance videographer: You damage a rented space while filming on location.

Typically, you’re more likely to need general liability insurance if you:

• Meet clients face-to-face. For example, consultants, coaches, photographers, and event planners.
• Work in shared spaces like coworking studios or client offices.
• Use tools, cameras or creative gear that could accidentally damage someone else’s stuff.
• Create or promote content where copyright or advertising disputes could arise (like designers, writers and marketers).
• Attend events or trade shows where injuries or property damage could happen.

In these situations, you’re more likely to get sued for bodily injury, property damage or advertising harm.

Which types of freelancers don’t need General Liability coverage?

General liability insurance might not be essential for everyone. You probably don’t need general liability if you:

• Never work with clients who ask for proof of insurance.
• Never meet clients in person.
• Don’t use or transport equipment for work.
• Work entirely remotely from home and never rent office space, studio space or a co-working space.

Even if general liability isn’t right for your business, other types of business insurance could help protect your freelance career.

Other types of business insurance for freelance workers

While general liability insurance could help protect freelancers from some claims, it can’t protect them from every business risk. Other types of freelancer business insurance could add more protection, including:

• Professional liability insurance: Also called errors and omissions insurance (E&O), could help protect you if a client claims your professional mistake, advice or a missed deadline caused them financial loss.
• Commercial property insurance: Property coverage could help with costs to repair or replace your essential tools like laptops, cameras or creative gear if they’re stolen from or damaged in your office.
• Workers’ compensation insurance: This coverage is usually required if you hire employees. It can help cover medical expenses and lost wages after a work-related injury.
• Commercial auto insurance: If you drive for business, such as visiting clients or hauling equipment, personal car insurance doesn’t always cover business-related claims.

How is General Liability different from Professional Liability insurance?

If you’re a freelancer, depending on the type of work you do, you may already know about professional liability insurance (also called errors and omissions insurance or E&O). This coverage helps cover financial losses related to your professional services.

For example, if a client claims your advice, design or strategy caused them to lose money, professional liability insurance for freelancers can help cover legal fees or settlements.

Many freelancers choose both types of coverage to help protect their work from physical accidents and professional mistakes.

This story was produced by ERGO NEXT and reviewed and distributed by Stacker.