Why a Gig Worker Needs Business Insurance (and How Much They Should Buy)

Why Gig Workers Need Business Insurance (and How Much They Should Buy)
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What kind of insurance does a gig worker need?

As a gig worker, you are essentially a self-employed business owner providing services on a freelance or contract basis. While the gig economy offers great flexibility, it also means you don’t have the same protections as a traditional employee. That’s why it’s crucial for gig workers to have proper business insurance coverage.

Without the right insurance, you could be personally liable for things like injuries, damage to property, or professional mistakes that occur while working a gig. The costs of a liability claim can quickly wipe out your savings if you aren’t properly insured. Here are the main types of insurance gig workers should consider.

General liability insurance

This provides protection if someone is injured or their property is damaged due to your business operations. For example, if you spill coffee and stain a client’s expensive carpet as a housecleaner, general liability would cover the repair/replacement costs.

Most gig workers should have at least a $1 million general liability policy, with costs typically ranging from $300-$900 per year depending on your profession and location.

Professional liability insurance

Also called errors & omissions (E&O) insurance, this covers you if a client claims your work was mishandled or negligent and caused them a financial loss. It’s essential for any gig workers providing professional services, such as consulting, IT support, and accounting.

A typical policy runs $500-$1,000 per year for freelancers and can be increased for higher coverage needs.

Workers’ compensation insurance

If you get injured on a job, workers’ comp provides medical coverage and replaces lost wages during your recovery. It’s legally required for many contractor roles like construction, delivery driving, moving/hauling services and more.

Costs vary widely by state, profession, and payroll amount but are typically under $1,000 annually for solo entrepreneurs.

Where to buy insurance

Luckily, there are insurance companies and brokers that specialize in affordable policies designed specifically for self-employed individuals, freelancers, and gig economy businesses. A few top options with consistently high customer satisfaction rating include:

Shop around and compare quotes, coverage, and support to find the right policies for your gig work and budget. Having the proper insurance gives you essential protection and allows you to confidently grow your freelance business.

For more, here are the best retirement accounts for people who are self-employed.

Meredith Dietz

Meredith Dietz

Senior Finance Writer

Meredith Dietz is Lifehacker’s Senior Finance Writer. She earned her bachelor’s degree in English and Communications from Northeastern University, where she graduated as valedictorian of her college. She grew up waitressing in her family restaurant in Wilmington, DE and worked at Hasbro Games, where she wrote rules for new games. Previously, she worked in the non-profit space as a Leadership Resident with the Harpswell Foundation in Phnom Penh, Cambodia; later, she was a travel coordinator for a study abroad program that traced the rise of fascist propaganda across Western Europe.

Since then, Meredith has been driven to make personal finance accessible and address taboos of talking openly about money, including debt, investing, and saving for retirement. Outside of finance writing, Meredith is a marathon runner and stand-up comedian who has been a regular contributor to The Onion and Reductress. Meredith lives in Brooklyn, NY.

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