Types of Insurance for Freelancers

There are several types of insurance freelancers can use to protect themselves against an array of risks. Depending on your circumstances, you may need several types of business insurance, such as general liability or professional liability, as well as personal insurance, like health and life insurance. 

In this article, we’ll explore some of the most common types of insurance that freelancers should consider.

Common Types of Freelancer Insurance

As a freelancer, you may face many risks that could lead to financial losses. To protect yourself against these potential risks, consider several different types of insurance coverage. Here are some of the most common types:

General Liability Insurance

General liability insurance protects businesses and individuals from damages and potential legal claims. This coverage typically covers bodily injury to customers or members of the public, damage to customer property, and reputational harm that may result from an accident or other incident. It also includes coverage for things like legal and court costs, settlements, or judgments against the policyholder. 

General liability insurance is a valuable investment for any freelancer who runs a for-profit business and regularly interacts with the public. It’s particularly beneficial for those who operate in high-risk industries, as they face increased exposure to potential liability claims. 

Professional Liability Insurance

Professional liability, also called errors and omissions insurance, covers expenses related to lawsuits that may arise if a client alleges that they’ve experienced financial loss due to an error or omission on the part of the freelancer. 

You can tailor professional liability coverage to different professions, from lawyers to accountants and architects. It’s ideal for freelancers who want to protect themselves from unexpected legal costs arising from client disputes—especially businesses and professionals providing services or advice their clients rely on.

Business Interruption Insurance

Business interruption insurance is a type of insurance that pays a benefit when your freelance business has to temporarily close as the result of a natural disaster, power outage, or civil unrest. It’s designed to safeguard your operations and is especially useful in ensuring continuous revenue flow even during interruptions. This insurance covers the loss of income that your business would experience during the shutdown period and the expenses incurred in getting the company up and running again. 

Business interruption insurance benefits all types of businesses, from freelancers to multinational corporations. It’s best for small business owners who depend on their income to cover fixed costs or pay personal bills—especially if they live in an area with a high risk of natural disasters. With business interruption insurance, you can ensure your business can quickly reopen following any unforeseen interruption.

Personal Insurance

As a freelancer, you are responsible for insuring against personal risks you face, as well as those you face in business. So, in addition to investing in business insurance policies like general liability and professional liability, it is also vital to secure adequate personal insurance. 

These are some of the most common types of personal insurance:

• Health insurance. Health insurance is a contract between an individual and a health insurance provider, which helps cover the cost of hospitalization, surgery, consultation fees, and lab tests. For freelancers, health insurance can be beneficial as they typically do not have access to employee benefits. By investing in a comprehensive health insurance policy, freelancers can protect themselves against hefty medical bills, ensuring they receive the care they need without worrying about considerable financial burdens.
• Life insurance. Life insurance is another type of insurance designed to provide financial security to your loved ones in case of your untimely passing. Life insurance is a contract between an insurer and a policyholder, where the insurer pays a death benefit to the policyholder’s beneficiaries in exchange for regular premiums. Beneficiaries can use this benefit to pay off debts, mortgages, or living expenses when the policyholder dies. 
• Disability insurance. Disability insurance is another potential safety net for those who make their living as freelancers. This type of coverage protects workers from loss of income if they cannot work due to an illness or injury. Disability insurance will typically cover a percentage of your income for a designated period, which can help ease the financial burden if you cannot continue taking on work. 
• Auto, home, and renters Insurance. Home, auto, and renters insurance are all types of coverage that can help protect freelancers in various ways. Home insurance provides coverage for damage to a freelancer’s residence resulting from events such as fire, theft, and natural disasters. Auto insurance covers car accidents, theft, and damage to the vehicle, including those that may occur while driving to and from work. With insurance, freelancers can protect themselves financially and avoid unexpected costs that could hinder their business operations.

Additional Freelancer Insurance Coverage

In addition to the core types of insurance listed above, freelancers may need other types of insurance, depending on their location and occupation. Here are a few:

Cybersecurity Insurance

Cybersecurity insurance is a type of coverage that helps protect a business from losses stemming from data breaches and other cyber attacks. This insurance covers the costs of cyber attacks, including network damage, data theft or loss, intellectual property infringement, and cyber extortion. It is extremely important for any business that stores sensitive or proprietary information in the cloud.

Commercial Auto Insurance

Commercial auto insurance covers vehicles used for business purposes other than commuting. It provides coverage for bodily injury and property damage liability, collision, and comprehensive coverage. For freelancers, commercial auto insurance is particularly important because it can protect their assets in the event of an accident while on the job. 

Freelancers who use their personal vehicles for work purposes, such as delivering goods or traveling to job sites, should consider obtaining commercial auto insurance to ensure they are fully covered in the event of an accident. Otherwise, if they’re in an accident while using a car for work, they may not be covered by their personal auto policy.

Commercial Property Insurance

Commercial property insurance protects business owners, including freelancers, against losses such as theft, damage, and vandalism. This insurance can cover the damages caused by natural disasters such as floods, earthquakes, and storms. In addition, it covers losses incurred by defective equipment or accidental property damage. Commercial property insurance’s main aim is to protect businesses, including freelancers, against unforeseen circumstances that can lead to financial loss. 

For freelancers who often work from home and have their own equipment, this coverage is critical as it can help them recover in case of any damages or theft. Freelancers must have this type of coverage to ensure that they can continue to work without any disruption and have peace of mind that their property is covered.

Rideshare Insurance

Rideshare insurance is an important consideration for freelancers who use their personal cars for business purposes. It protects ride-sharing drivers in the event of an accident, covering damages and liabilities that may arise. This type of insurance is specifically designed for those who use their vehicles for ride-sharing services, such as Uber or Lyft. 

How Much Does Business Insurance for Freelancers Cost?

Freelancer insurance can vary in cost depending on the type of coverage needed. Freelancers’ general liability insurance typically costs around $500 to $2,000 annually. Professional liability insurance, also known as errors and omissions coverage, can cost around $1,000 per year. Workers’ compensation coverage, which freelancers aren’t typically required to carry but should have if they work in a high-risk injury, can vary greatly depending on the size of your business and the amount of risk associated with your work. 

It is important to speak with an insurance agent to determine which types of coverage are necessary for your business and to receive a personalized quote for your specific needs. Investing in insurance for your freelance business now can save you from devastating financial consequences in the future.

Who Needs Freelancer Insurance

If you are a freelancer or an independent contractor, it is essential to have insurance that covers the specific risks that you and your business face. Though freelancers aren’t typically required to carry insurance (except for specific industries in certain states), it is still highly recommended. Even if your client does have coverage, it may not protect you from all potential risks. 

Insurance can protect you against lawsuits, property damage, and other unforeseen losses. Some clients may require you to carry insurance to work on their projects. 

Where to Find Freelancer Business Insurance



If you need to buy business insurance to help protect against losses as a freelancer, the first thing to do is research the type(s) of coverage you need. Once you know which types of insurance you want, you can find a carrier specializing in that type of insurance. In many cases, you bind coverage online after providing some cursory information about you and your business.

If you have more specific needs that need to be addressed, such as through a combination of policies, you may work with an independent insurance agent to help you find the right provider and policy for you. They may offer policies specifically tailored to freelancers or be able to recommend a reputable provider. 

Additionally, online marketplaces such as Freelancers Union or Fiverr offer insurance options to members. Another helpful resource is the Small Business Administration (SBA), which offers information on insurance providers and requirements for small businesses. By investing in business insurance, you can ensure your freelance business's long-term security and success.