As a Freelancer Do I Really Need Insurance?

Richard Ou
Wednesday, November 29, 2023

As a freelancer, you're the CEO, the HR department, and the financial planner of your own enterprise. One important aspect that often gets overlooked in the hustle of client work and deadlines is insurance. When you're self-employed, there isn’t an employer to provide a safety net of health benefits or liability coverage. So, the big question is: Do freelancers really need insurance? In this blog post, we’ll break down the types of insurance that freelancers should consider and the risks they help mitigate.

Understanding the Risks of Freelancing

Freelancing can seem like a carefree career path, but it comes with its own set of risks. For instance, if a client were to sue you for breach of contract or if you accidentally damaged a client's property, would you be able to cover the legal fees and potential damages? Or what if you were unable to work due to illness — how would you manage the loss of income?

Being aware of these risks is the first step toward understanding why insurance may be necessary. Let's explore some of the key insurance types that can help protect you as a freelancer.

Types of Insurance Freelancers Should Consider

Health Insurance

Health insurance is often the first type that comes to mind. Without coverage, a single medical emergency can lead to a financial disaster. As a freelancer, you can purchase individual health insurance through the Health Insurance Marketplace, where you may also qualify for subsidies based on your income. Additionally, professional organizations often offer group insurance rates for freelancers.

Liability Insurance

There are two main types of liability insurance to consider—general liability insurance and professional liability insurance (also known as errors and omissions insurance). General liability insurance protects against physical injury or property damage claims, while professional liability insurance covers claims of negligence, misrepresentation, or inaccurate advice.

Disability Insurance

This type of insurance is designed to provide income if you're unable to work due to a disability. It's a particularly wise consideration for freelancers, whose income directly depends on their ability to work.

Business Property Insurance

Even if you work from home, your homeowner's or renter's insurance may not cover your business equipment. Business property insurance can cover the cost of repairing or replacing your business equipment if it’s stolen or damaged.

Life Insurance

If you have dependents or significant debts that others would assume in the event of your death, life insurance can provide essential financial support. As a freelancer, you won't have access to employer-provided life insurance, so it's something to consider purchasing independently.

Evaluating Your Insurance Needs

Each freelancer's situation is unique, so it’s important to evaluate your own needs when considering insurance. Here are some guiding questions that can help:

- What would be the financial impact if you were unable to work for an extended period?

- Would your savings cover potential legal suits from unsatisfied clients or accidents?

- How much would it cost to replace all your business equipment if it was lost or damaged?

- How many people depend on your income, and what would happen if it were to suddenly disappear?

Finding the Right Insurance

When searching for insurance, it's crucial to compare policies and providers. Here are some tips:

- Shop around and get quotes from multiple insurance companies.

- Consult with an insurance broker who specializes in freelance or small business insurance—they can often find the best rates and coverage options for your specific needs.

- Read the fine print and understand what is and isn't covered by the policy.

- Joining a freelancers' union or association can give access to insurance at discounted group rates.


Insurance might seem like an unnecessary expense when you're juggling the finances of freelancing. However, the peace of mind and financial protection it offers can be invaluable. By weighing the potential risks against the cost of coverage, freelancers can determine the types and amounts of insurance that make the most sense for them.

Ultimately, having the right insurance means you can focus on what you do best—growing your business and doing great work for your clients, secure in the knowledge that you're protected against the unexpected twists and turns on the path of the freelance life.