A freelancers guide to business insurance

Freelancing gives you flexibility, control, and independence. It also means you carry the risk yourself. Many freelancers only realise this after something goes wrong. A client dispute, a damaged laptop, or an injury can quickly turn into lost income and unexpected costs.

Running a business, even a small one, comes with exposure and insurance helps freelancers manage that risk.

What is a freelancer?

A freelancer is someone who works for themselves and provides services to clients on a contract or project basis. You might work alone, remotely, from home, or on client sites. Common freelance roles include designers, consultants, writers, IT contractors, marketers, photographers, tradies, and creatives.

Even if you work part time, from your kitchen table, or for a single client, you are usually considered a business owner. That is where insurance becomes relevant.

Why do freelancers need insurance?

Freelancers face many of the same risks as larger businesses, just on a smaller scale. The impact can still be significant, which is why many freelancers consider insurance. Business insurance does not prevent these events, but it can help manage the financial impact if they occur.

Some of the reasons why freelancers often consider insurance include the following:

• Client claims can happen. Mistakes and misunderstandings occur. A missed deadline, incorrect advice, or scope confusion can lead to disputes. If a client alleges your work caused them a financial loss, even if you disagree, defending that claim can be costly.
• Accidents happen. You could injure someone, damage property, or get hurt yourself while working.
• Your income often depends on you alone. If something stops you from working, there may be no sick leave or backup.
• Some clients require it. Many businesses will not engage freelancers without certain insurance in place.

Key types of insurance freelancers often consider

Professional Indemnity insurance

This type of business insurance covers claims related to professional services or advice. It may respond to allegations of negligence, errors, or omissions that cause a client financial loss. This is common for consultants, designers, IT professionals, marketers, and anyone providing advice or deliverables.

Public Liability insurance

This covers claims for personal injury or property damage caused to third parties. For example, a client trips over your equipment, or you damage property while working onsite. Even freelancers who mostly work from home may need this if they meet clients or attend events.

Cover for business equipment

Laptops, tools, cameras, and specialist equipment are often essential to freelance work. Portable Equipment cover is available as part of a Business Insurance Pack.

Personal Accident and Illness insurance (or income protection)

Accidents can happen regardless of how careful you are at work or after hours. Should the unexpected happen, Personal Accident and Illness insurance can cover your income and provide benefits for permanent disability and even death if you’re unable to work due to illness or injury.

Freelancers do not have employer benefits, so this is often considered by those who rely solely on their income.

BizCover does not sell income protection, but we do offer Personal Accident and Illness insurance from a number of selected Australian insurers.

Common misconceptions about freelancers and insurance

• “I’m too small to need insurance.” Size does not remove risk. Claims can arise from a single project or interaction.
• “I work from home, so nothing can happen.” Client claims are often about work outcomes, not physical locations.
• “My contracts protect me.” Contracts help, but they do not stop claims from being made.
• “Insurance is only for tradies or big firms.” Many professional and creative freelancers carry insurance, especially when working with business clients.

How much does insurance cost for freelancers?

Insurance costs vary based on your industry, turnover, services, and level of cover. Some freelancers pay a relatively low monthly amount, others more, depending on risk. The key point is that cost is linked to exposure, not business size alone.

Premiums can often be adjusted by choosing appropriate limits and cover types. It is usually more affordable than people expect, but it should still be reviewed carefully.

How much cover should freelancers consider?

Choosing the right level of cover to match your needs depends on your business nature and size. As your business is unique, there are several things you may wish to consider before making a decision on insurance. Freelancers may consider factors such as:

• The type of work you do.
• The size and expectations of your clients.
• Contractual requirements.
• The potential financial impact of a claim.