Should you get business insurance? Maybe?
Someone told us to get business insurance, so we looked into it.
But this episode needs a disclaimer, which is: we are not lawyers. Don't take this as legal advice. Consider this an amateur opinion from expert freelance writers.
One of us has business insurance, and one of us doesn't. We'll go over our thoughts on insurance, why it might come in handy, and other types of insurance to consider.
“When it comes to insurance, most situations you'll need it for probably will never happen. But it's for the worst-case scenario. And you want to be protected for that.”
If you're risk-averse, talk to an insurance agent about your options. But start here for a sneak peek into how it could benefit you as a freelance writer. Basically, we answer the question: “Is it worth it?”
What is business insurance for freelance writers?
Business insurance helps protect freelance writers’ professional assets from:
Legal issues
Property damage and vandalism
Theft
Income loss
Employee disabilities
And more
There are various types of business insurance. Your insurance type depends on your employees, industry, location, etc.
You might not classify your freelance writing services as a company, but you could still benefit from protection. You might not have employees or property tied to your business. Is business insurance still a good idea for you? Let's take a look.
Kaleigh and her freelance writing business LLC
When Kaleigh started her business, several people, including her accountant, asked whether or not she had business insurance. She Googled local resources and got a couple of quotes. Though business insurance costs vary depending on the type and extent of coverage, Kaleigh estimated it would cost a little over $100 USD each month.
In the third or fourth year of ownership, Kaleigh decided to structure her business as a limited liability company (LLC). She chose this over business insurance for a few reasons:
It can protect your personal assets in the face of legal issues.
It gives you more flexible tax options.
It offers basic protection for those who don't feel they need business insurance.
While business insurance didn't make sense to Kaleigh, it might make sense for you.
Why invest in business insurance as a freelance writer?
Sometimes basic protection isn't enough. You might wonder under what circumstances your clients could or would sue your business, and this is where terms like defamation, non-compete agreements, and intellectual property NDAs come into play.
Emma's friend shared some of her research and legal advice. Her lawyer recommended having a $1 million business insurance policy and a $1 million personal umbrella insurance policy. Check out Freelancers Union for more information on business insurance.
“I have business insurance. Will I ever need it? Honestly, I hope not. Is it a waste of money? I hope so. It's probably useless, but if something did happen, I'd be financially protected.”
Other insurance options for freelance writers
Insurance isn’t just about business liabilities, either. What if you couldn't work? Would you have the income you need to maintain your lifestyle?
“If I was out roller skating and fell and broke my wrist, I couldn't do my work. What would I do? That's my biggest fear. What if I'm incapacitated to the point where I can't work?”
That's where other types of insurance come in handy. When it comes to protecting your finances, it's essential to consider a range of insurance options. Aside from dental, vision, and employee benefits, there are two main types of insurance to keep in mind:
Supplemental health insurance, which includes accident, critical illness, and hospital indemnity.
Disability insurance, both long-term and short-term, ensures you're protected if you cannot work.
Want more insight? Check out Unum, a stellar insurance company with lots of explanatory resources, to find out more.
Business insurance for freelance writers: It’s your call
Ultimately, it’s up to you to decide whether your business needs insurance. One thing’s for sure: it’s worth researching.
This season of the podcast is brought to you by Peak Freelance, which gives you the tools to find better clients, raise your rates, and focus on doing work you enjoy. Access a supportive community of like-minded freelancers and experienced writers who make a living writing. All Access members unlock a library of resources, templates, and interviews with content pros (like me!) to grow and scale your business. Visit peakfreelance.com/membership and use coupon code FWC10 to 10% off an All Access membership.