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The Orange

Resources for the modern insurance agent

Freelancers Need Insurance for Their Businesses — Here's How Agents Can Help

by Precise Leads

June 1, 2018

By 2027, the majority of the American workforce will be made up of freelancers and solo entrepreneurs with unique insurance needs of their own.

A recent survey by Upwork and Freelancers Union forecasts that freelancers will make up the majority of the American workforce by 2027. That’s not far off from the percentage of Americans who work independently today; according to that same survey, roughly 57 million Americans — or 36% of the workforce — classify themselves as freelancers.

Given the projected growth of freelancers in the economy, insurance agents may find many of their clients working as independent contractors, or, alternatively, running a small business out of their home as a solo entrepreneur. What’s more, these clients might be unaware of the unique insurance requirements they face, meaning that they’re in need of expert guidance when it comes to choosing coverage that works for them. Agents can make the most of this opportunity by being prepared to discuss the types of insurance freelancers need.

If you’re wondering how to get started, try asking these five questions:

1. Are Your Business Assets Protected?

Homeowners and renters insurance may exclude business equipment such as computers and tablets from coverage. To protect assets that are essential for your clients’ line of work, discuss whether a business owner’s policy — one that insures their property much as commercial property insurance would — is right for them. Alternatively, clients can purchase contents insurance that specifically insures items in their home office.

2. Do You Have Liability Insurance for Your Business?

Despite their best efforts, freelancers and independent contractors may run into legal troubles related to products that they deliver. Professional liability insurance, otherwise known as errors and omissions insurance, pays for third-party claims in those instances. A business owner’s policy includes general liability coverage as well, which would cover expenses related to any injuries caused by the product or on work premises.

3. Are Your Computer Networks Secure?

Although your clients may have taken every precaution to secure their home-office network connections — either by encrypting their data or avoiding suspicious programs or emails — illicit actors may still find a way to gain access to their digital records, including their own clients’ information. To pay any costs associated with a data breach, suggest that freelancers and independent contractors look into cyber insurance. If they regularly deal with sensitive information, it may be worth the investment.

4. Do You Use Your Own Car for Business?

Even if your clients work mostly from a home office, they may drive to meet potential prospects, pick up materials they need for their business, or make deliveries of finished work product. As such, make sure you review their current personal auto insurance policy to figure out how it covers these activities. If the coverage is insufficient, clients should consider commercial auto insurance to protect work-related excursions.

5. What Would Happen if You Can’t Work?

Freelancers and independent contractors often lack the safety net of workers’ compensation if they experience serious injury or illness. If the worst happens and they’re unable to continue working for an extended period of time, they may run into serious financial troubles for themselves and any dependents. To ensure that your clients have a steady stream of income in this kind of worst-case scenario, advise them to purchase disability insurance.

By preparing to ask these questions of your clients, you’ll be better positioned to help them as they join a growing sector of the American economy. Whether they’re freelancers, independent contractors, or small business entrepreneurs making it happen all on their own, having the right insurance coverage will provide them with a stable foundation from which their book of business can grow.

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