Congratulations on running your own business! All of us at Nav are proud of you. We know it isn’t easy. Freelancing takes a ton of courage and a lot of hard work. These 10 tips will help you keep what you build:
1. Know bad things will happen.
Think bad things can’t happen to you? Disaster happens to businesses of all sizes. Freelancers and independent contractors don’t get a pass! You can do everything right and bad luck will still eventually strike. Don’t make the mistake of ignoring these realities (potential lawsuits, people getting hurt, property being damaged, etc.).
2. Protect yourself with insurance.
Wringing your hands every day isn’t going to help. Protect yourself with insurance. You pay premiums to transfer some of your financial risks to an insurance company. This frees you up to worry less (about that potential lawsuit, etc.) and work more on building your business.
3. Understand it’s a legal contract.
An insurance policy is not a gallon of milk; it is not some homogeneous product. Policies vary greatly even between freelancers buying the same policy types from the same company. Most policies are very customizable with limits and optional coverages. Don’t just compare prices! Compare coverage.
4. The devil is in limits & exclusions.
Just because you have the correct type of coverage you need, doesn’t mean you’ll have enough of it when it’s time to turn in a claim. Virtually all policies require you to select how much of each coverage you want with coverage limits. They also will list what isn’t covered at all with exclusions. Never buy without understanding these.
5. Take inventory of what’s required to work.
What they require and what you want are often not the same thing. You may be required to have certain types or certain amounts of insurance. Usually what they require isn’t so much about protecting you as much as it’s about ensuring you have some minimum coverage for the protection of others (them or those they serve). Some of the entities that may have coverage requirements for you include:
- Federal, state, and local governments
- Freelancer marketplaces
These entities will request proof from your insurance provider(s) that you have the coverage they require. Often, if you drop this required coverage, these entities are notified so they can stop working with you (in the case of clients), pull licensing from you (governments), or force more expensive insurance on you (banks).
Know what’s required of you and make sure to maintain this.
6. Figure out what else you should have.
Just because insurance isn’t required doesn’t mean you don’t need it! Remember that many requirements aren’t really about protecting you and your business as much as they are about protecting others. So, don’t stop with just minimum requirements! Take a look at your risks and the coverage you would like to have.
7. Be open to options!
It’s ok if you currently don’t know exactly what you need and want! What’s important is to just care enough to start finding answers. Start shopping for potential insurance providers! The best ones for you will also be happy to help you figure out your risks and the coverage you want.
8. Consult with at least one good Indie.
Over 70% of business insurance is distributed through the independent insurance agency channel (Indies). A good Indie with expertise in insurance for freelancers can help you make smart coverage choices, shop leading insurance companies, and provide one-stop shopping for all of your insurance needs.
Of course, you have other options to consider. These include shopping insurance companies directly through their websites, call centers, or company agents. Whatever you do, we recommend checking with at least one good Indie so you can consider a wide range of options before making a choice.
The next two insurance tips are from our friends at Mylo – the awesome indie we trust to help Nav’s customers with their business insurance – and other insurance needs.
9. Cover the big stuff first.
It makes no sense to buy a bunch of coverage for small risks while leaving yourself totally exposed to the big stuff. For example, a common mistake for freelancers is to have really good coverage on their business property (computers, office equipment, etc.) but no professional liability policy in place (or one without sufficient limits). This makes no sense! Losing $5000 or $10000 dollars in computer equipment isn’t nearly as serious as dealing with an uncovered lawsuit that could result in hundreds of thousands of dollars in damage.
Spend premiums on the most serious risks first and then consider the smaller stuff as your budget (and risk tolerance) allows.
10. Get a comprehensive plan.
The phrase you’ll hear from insurance people is ‘coverage gaps’ or ‘gaps in coverage.’ These are areas you should have coverage but don’t. For example, let’s say you have dependents that would suffer financially if you were to die but you don’t have sufficient life insurance. That’s a major ‘gap in coverage.’ Or, let’s say you have plenty of business insurance but you have lower limits of liability on your personal auto policy than is advisable; that is also a gap in coverage. As a freelancer, you want to have comprehensive coverage in your business and personal life to protect your money and lifestyle.
Discover what Mylo can do for you
Some things to expect with your first consultation:
- Get to know you and your business goals/needs
- Shop multiple carriers for the best value
- Give you confidence in your business protection
- Awesome resource! Be here for you in the future too!
- Make everything as easy as possible for you
Be sure to ask them about any special programs in your specific industry. They have many unique products that are very difficult to beat in terms of value.