subject: Self Employed Liability Insurance - Offset The Risk Of Doing Business [print this page] Without self employed liability insurance, independent contractors are taking chances with their financial futures. Consultants and freelancers span all industries, but none are immune from lawsuits. Clients can sue for gross negligence, bad advice, damages or losses. Any member of the public can claim injury due to a product or service. Either scenario can result in the loss of personal assets if an independent contractor is not protected. The cost of litigation alone can be expensive. Court costs coupled with a verdict against the defendant and a sole proprietor can be monetarily wiped out. Insurance is designed to offset those possibilities.
The most common type of self employed liability insurance is general liability coverage. As the name implies, it's an all-encompassing policy covering bodily injuries, personal injuries and property damage. Many businesses prefer, if not require, independent contractors to carry general liability. Policy rates are based on the exact type of work being performed, with low-risk business classes paying less in premiums than high-risk classes. In addition, policies may cover damages due to advertising products or services. Typically this involves defamation or copyright infringement but may also involve violations of privacy. However, this rider does not apply to freelancers in the media or advertising industry.
Writers, designers and consultants who offer advice or expertise opt for another form of self employed liability insurance, professional indemnity. Indemnity coverage includes claims of negligence, errors in service and breach of contract. Copyright infringement might also be included in the policy. Retail store owners and small businesses that manufacture goods fall into another category. When customers claim injury due to a defective item, the store owner and manufacturer can both be sued. Product liability insurance covers products made or distributed. This insurance can also apply to independent contractors who install faulty equipment.
Liability insurance covers products and services. Yet many professionals work out of their homes. Passerby can claim injury or damages because of the home office. Clients can claim losses as a result of service in a contractor's home. A fire might destroy data or equipment. Homeowner insurance policies will not cover any of these business problems. In-home business policies, however, cover equipment and property along with limited liability for client injuries. Business owner policies combine general liability and property insurance for broader exposure coverage. No matter what type of industry a contractor is in, there will always be some level of exposure. With enough self employed liability insurance, the consultant's personal assets remain unaffected.
by: David Adeoye
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