Getting insurance as a freelancer
Most people’s insurance is tied to their employer, so one of the most important things to take care of when you become self-employed is getting your insurance in order! There are a few different insurance types that you should be aware of and consider.
- Health
Having health insurance is required by law, so this is definitely the top priority. Firstly, I would check if your expected income is below the Medicaid threshold in your state (usually around $15–17,000 for an individual). Especially if it’s your first year in business, you may not be making that much. You may qualify for completely free health insurance if you’re below this threshold.
Secondly, if you have a partner, you should check if you can be added to their plan if they are employed. Most employers give employees the option of adding on a spouse for a marginal cost, and it may be the easiest and cheapest way of getting medical cover.
If you are above this threshold or cannot be covered by a partner, would recommend using Stride Health to find your ideal plan. Stride will also factor in if you qualify for a reduced price plan based on your income. Without a tax credit, monthly premiums will range $200–600 USD depending on the deductible you’re comfortable with.
2. General and professional liability insurance
General liability insurance protects against someone filing a legal claim against the business. Common legal claims filed include property damage and bodily injury and associated medical costs. Even if you’re not working in a physical industry, general liability insurance can protect against damages to the business based on advice you give. Some large clients will require you have general liability insurance.
Professional indemnity insurance covers you for errors or mistakes you may have made in your work. Although all of us try our hardest to be diligent and accurate mistakes happen, and can cause issues for clients. If it’s significant enough they may try and recover some of the cost of damages by suing you, professional indemnity protect you in this case and will normally cover legal fees and any pay out. For example, if you’ve built the clients mobile app and it goes down for 24hrs they may claim they’ve lost customers and it’s damaged their reputation. If you think you need professional indemnity insurance we’d recommend getting cover for $1m, as some claims can be significant.
The cost ranges from $400–750 per year. Our three favorite providers are The Hartford, Hiscox, and Next Insurance.
3. Other types of insurance
Stride also offers dental, vision, life, and accident insurance, but generally you save money by paying out of pocket for these services rather than buying insurance. For example, an eye exam at Costco will cost $70 + $95 for Warby Parker glasses, which is $165. VSP’s lowest cost plan is $156 and includes co-pays, so you’re not saving a lot by getting insurance.
