One lawsuit can bankrupt you.
A client claims your work damaged their business ($50k loss). They sue you. Even if you win, legal fees cost $10k+. Business insurance covers the claim and the legal fees.
Here are the best business insurance options for freelancers.
Bottom Line: Get general liability insurance ($250-500/year). Consider disability insurance if you depend on freelance income. Skip workers’ comp (you’re solo).
Why Freelancers Need Insurance
Liability insurance protects you if a client sues. “Your code caused their server to crash and they lost $100k” = their lawyer sues you = your insurance defends you and pays the claim (up to your limit).
Without insurance, you’re paying out of pocket.
Income protection insurance replaces your income if you get sick or injured and can’t work for months.
Best Value: General Liability
General liability insurance covers bodily injury, property damage, and some professional liability. For freelancers, cost is low: $250-500/year for $1M coverage.
You can get it from insurance brokers like Stride Health or Insureon. It takes 10 minutes online and coverage starts immediately.
Who it’s for: Every freelancer should have this. It’s cheap and it saves you if something goes wrong.
Cost: $250-500/year for $1M coverage.
Critical: Disability Insurance
Disability insurance replaces your income if you’re unable to work (illness, injury, mental health).
Most freelancers skip this and they regret it. If you can’t work for 6 months, you have no income. Disability insurance gives you 60-70% of your normal income while you recover.
Who it’s for: Freelancers whose household depends on their income. If you could survive 6 months without working, skip it.
Cost: $50-150/month (varies by age and occupation).
What You DON’T Need
Workers’ compensation: Only required if you hire employees. Skip it.
Cyber liability: Protects if you have a data breach. Overkill for most freelancers unless you handle client data.
FAQ
Q: Is business insurance tax-deductible? Yes. It’s a business expense.
Q: What’s the difference between general liability and professional liability? General liability covers physical injury and property damage. Professional liability (errors & omissions) covers if your work causes financial loss. Get both if possible.
Q: How much coverage do I need? $1M general liability is standard for freelancers. If you do risky work (mechanical systems, financial advice), consider $2M.
Q: Can I get coverage if I’m self-employed? Yes. Most insurance companies don’t discriminate between sole proprietors and LLCs.
Conclusion
Get general liability insurance. It’s $250-500/year and it’s the best insurance-to-cost ratio.
Get a quote on Insureon or Stride Health.
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