Insurance Must-Haves for Freelancers & Side Hustlers

Freelancing is becoming a viable career for many Americans, but there’s a sacrifice involved with self-employment: benefits.

According to a LinkedIn survey, 92% of freelancers say their clients don’t provide access to any benefits. Freelancers are on the hook not only for things like healthcare and life insurance, but also protection for their business from legal and financial issues.

Whether you’re considering a freelance career or are already knee-deep in self-employment (go you!), here are some insurance must-haves for freelancers and side hustlers.

Personal Insurance Must-Haves

Maintaining the health and well-being of yourself and your family is paramount. As a freelancer, you’re your own boss – and your own HR department. While you’re free of the all-seeing eye of your previous employer’s HR, you’re also without employee benefits.

That means it’s up to you to create a benefits package that takes care of you and your loved ones. Here are some personal insurance must-haves that will help protect you and those you care about.

Health Insurance

Health insurance is one of the best ways to prevent financial disaster following a medical emergency. Without it, emergencies can cost upwards of hundreds of thousands of dollars. Even if you’ve got that much cash stuffed under your mattress, chances are you can think of some better ways to spend it. Spa day, anyone?

Thankfully, you have some options:

  • COBRA extends the same health coverage from your employer for a specific length of time after a qualifying life event, such as quitting or termination. However, you may be responsible for paying up to 102% of the plan’s premium.
  • You may convert your existing group coverage into individual coverage if you qualify for a special enrollment period (like quitting your job).
  • You may purchase health insurance from the Health Insurance Marketplace or qualify for Medicaid.
  • Associations, networking groups, and unions, such as Freelancers Union, tend to offer healthcare insurance options to members at discounted rates.
  • You can also shop around for coverage from individual health insurance companies like Oscar.

Dental and Vision Insurance

There’s plenty of reasons to dread going to the dentist. If you’re uninsured, cost can be a reason to avoid making an appointment. When you factor in the added expense of uninsured vision care, you can end up spending a pretty penny over the course of a year — especially if you have children.

Luckily, dental plans cost a modest $350 per year on average. Premiums for vision insurance are similarly inexpensive, ranging from $91 to $588 per year, depending on individual or family coverage.

Disability Insurance

Approximately 90% of disabilities are the result of illnesses, not accidents. According to the Council for Disability Awareness, one in four of today’s 20-year-olds can expect to become disabled for at least a year before reaching retirement age.

How can you continue to make bill payments and stay financially healthy if you’re too injured or ill to work? Disability insurance pays out a percentage of your income for a period of time, reducing your financial stress while you focus on healing.

Life Insurance

According to the National Funeral Directions Association, a traditional funeral costs $8,755 and cremation costs $6,260. The average savings account balance for an American is between 35 and 44 is $5,000 — not even enough to pay for a cremation.

And that’s not taking into account any accumulated debt or expenses still left behind…

Life insurance isn’t something you can neglect. It’s a way to provide for your family and loved ones when you’re no longer around to do so yourself. Sometimes, if you’re lucky, you can choose to convert group life insurance to an individual policy, but that could be expensive. Fortunately, you can purchase a life insurance policy in minutes, all without undergoing a medical exam.

If you’re applying for a small business loan, your lender might even require that you take out a life insurance policy to pay off the loan should you pass away. If so, you’ll need to request a collateral assignment once approved for life insurance coverage so that your lender can get a portion of the payout to pay off the loan balance.

Business Insurance Must-Haves

In an increasingly digital age, there are more threats to businesses than ever before. Even if your freelancing gig is location-independent and safe from classic threats like fires and robberies, one wrong tweet can be the catalyst to a costly legal battle that leaves you bankrupt. Yikes!

Issues of liability and property loss or damage can ruin not only your business, but threaten your family’s financial well being. Insuring your business from threats and dangers helps protect your financial welfare.

Liability Insurance

Some insurance is designed to protect you from others’ goof-ups. Liability insurance protects you from yourself — whether your 3 a.m. Twitter rant gets you into legal trouble or the UPS driver trips on your steps and breaks his arm.

There are three types of liability insurance that any freelancer should consider: general, professional, and cyber.

  • General liability insurance protects against injuries and property damage that happen in the workplace. It also protects against trademark and copyright infringement, libel, and slander.
  • Professional liability insurance, or errors and omission insurance (E&O), protects freelancers from instances of neglect, inaccuracy, or missing deadlines.
  • Cyber liability insurance protects freelancers from financial and legal issues resulting from a data breach or hack.

You may not need each type of liability insurance, so don’t stress about breaking the bank. Still, put some thought into the ways your business is exposed and how best you can protect yourself from liability.

Property Insurance

Take a gander around your office or workspace and consider the equipment you use for your business. Chances are the tools and equipment required for your business to properly function are a little pricey.

The loss or destruction of such equipment can put a hole in your wallet, and business equipment isn’t always covered by a homeowners or renters policy. (The Lord of the Rings knick-knacks keeping guard over your keyboard tray, on the other hand, may be covered.)

Property insurance will protect your investment in business equipment and tools. Some insurers may even bundle general liability and property insurance together into a business owner’s policy, or BOP, saving you a few extra bucks than if you purchased each separately.

Rideshare or Commercial Auto Insurance

Your normal car insurance may not cover you if you’re driving for business. Whether you’re making frequent trips to meet clients or driving for a rideshare company, you may need a separate commercial auto insurance or rideshare insurance policy.

Insurance Is a Necessary Cost for Freelancers and Side Hustlers

Build your own benefits package with the must-have insurance products that best protect your freelance career and lifestyle. It’s better to pay an expected premium than face a massive bill you’re unprepared for. That way, you can focus on your work and clients — and enjoy being your own boss.

Get started today and have coverage in a few easy steps