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What is freelancer insurance?

Freelancer insurance is a policy that aims to protect your freelance business from different risks that you might encounter while working. Although freelancers can come from a variety of different industries, many of the claims they face are similar - client disputes, property damage, and even cyber security breaches. In all such cases, freelancer insurance helps protect your finances.

The specific coverages offered in a freelancer insurance package will vary. It is a customizable product that can be tailored to meet the needs of each unique business. This allows a tutor to have a policy different from a videographer, which may be different from a corporate consultant. This flexibility enables each business to get an insurance policy designed to protect it from the perils inherent to its industry.

If you’re a freelancer by trade, there’s an insurance policy that can be shaped to your needs. Read on to learn more about how freelancer insurance works, or use our online quoter to see how much freelancer insurance will cost.

Is freelancer insurance mandatory in Canada?

Freelancer insurance is not mandatory in Canada. Freelancers of nearly all types can legally operate their businesses without it. But just because freelancer insurance isn’t a legal requirement, doesn’t mean it isn’t valuable. In fact, having even bare bones coverage can save you from paying sizable costs out of pocket, should an incident occur.

Plus, there are certain situations in which a freelancer will need insurance. For example, if you use a vehicle for business purposes – e.g. you’re a wedding photographer who uses your car to travel to venues and transport equipment – then you’ll have to get commercial auto insurance coverage, because your personal car insurance doesn’t cover work activities.

Additionally, some freelancers, especially those in industries like construction or trades, may also need commercial liability insurance to secure a business licence. In Ontario, for example, trades-based freelancers must have liability insurance to legally operate.

Even when it’s not required, carrying freelancer insurance is highly recommended. Some clients may insist on proof of insurance before hiring you, and it ensures you’re covered for accidents or legal disputes that would otherwise prove costly.

Who needs freelancer insurance?

Freelancer insurance is ideal for anyone running their own business, and who provides their services to clients. Even if you think your job is low-risk, or you work from the comfort of your own home, freelancer insurance can still prove invaluable.

Think of it this way - if you’re out there working for yourself, you’re exposed to potential risks. Freelancer insurance helps cover you in those tricky situations that you might not see coming.

Here are some professions where freelancer insurance is especially valuable:

• Writers and editors: If you’re writing articles, books or marketing content, insurance protects you if there are disputes over your work or if you accidentally use copyrighted material.
• Graphic designers and artists: Whether you’re designing logos, illustrations, or any other visual content, insurance can cover you if your work leads to legal issues or if your equipment gets damaged or stolen.
• Photographers and videographers: For those capturing special moments or producing visual content for clients, insurance can cover gear, liability issues, and any mishaps during shoots.
• Journalists: For those covering events in person or writing from their home or office, insurance offers protection for professional liability risks.
• Web developers and programmers: Designing and maintaining websites comes with its own set of risks. Insurance helps if you encounter issues like data breaches or client disputes over the functionality of your work.
• Consultants and advisors: When you’re offering expert advice, insurance protects you if a client claims that your recommendations caused them financial harm and wish to pursue legal action.
• Accountants and bookkeepers: Handling financial records and tax returns involves risks. Insurance covers you if there are errors or disputes related to the financial advice or services you provide.
• Teachers and tutors: If you’re educating or tutoring students, insurance can help with liability if accidents happen or if a client disputes your service.
• Musicians and performers: For those in the arts, insurance protects against issues like equipment damage, performance cancellations, or even legal claims related to your work.
• Craftspeople and artisans: Whether you’re creating jewelry, pottery or furniture, insurance helps protect your handmade products and covers you if anything goes wrong during the creation or sale process.

If you operate in any of these industries, having freelancer insurance can give you financial protection and offer peace of mind.

What type of insurance policies do freelancers need?

Different types of freelancers will need different types of coverage. The following list of typical freelancer coverages may not apply to all types of freelancers. That said, many freelancers will find the following kinds of protection relevant to their business.

• General liability insurance: This is the cornerstone of most insurance plans for freelancers. It helps protect you if someone gets injured or their property gets damaged due to your work. For instance, if a client visits your home office and accidentally trips over some equipment, general liability insurance covers medical bills and legal fees. Even if your work doesn’t seem high-risk, accidents can happen, and this coverage ensures you’re not stuck with the costs if they do.
• Professional liability insurance: Also known as errors and omissions (E&O) insurance, this coverage is essential for freelancers who offer expert advice or services. If a client claims that your work caused them financial loss—like missing a crucial deadline that led to lost revenue or making a mistake that damages their reputation—this insurance has you covered. It takes care of legal fees, settlements, or any damages from such claims, making it a crucial policy for consultants, designers, writers and other professionals.
• Commercial property insurance: If you work from a home office or rent a workspace, commercial property insurance protects your business equipment from risks like fire, theft, or accidental damage. Whether it’s your computer, camera, or other essential tools, this type of insurance ensures you don’t have to pay out of pocket to replace your equipment if something goes wrong.
• Cyber liability insurance: In today’s digital world, cyber liability insurance is increasingly important. If your business involves handling client data or running an online platform, this policy covers you against data breaches, cyberattacks, and other online threats. It helps with costs like data restoration, legal fees, and reputation management if your business is targeted by hackers or suffers from a security breach.
• Commercial auto insurance: For freelancers who use their vehicle for work, commercial auto insurance is essential. It covers accidents and damage that might occur while you're driving for business purposes—whether you’re meeting clients, delivering products, or transporting equipment. Personal auto insurance typically doesn’t cover business-related incidents, so this policy ensures your vehicle is protected while on the job.
• Tools and equipment insurance: If your freelance work relies on specific tools or equipment—like a camera for photographers, a laptop for writers, or specialized machinery for tradespeople—tools and equipment insurance is crucial. This policy covers the cost of repairing or replacing these items if they’re damaged, stolen, or lost. Since your tools are integral to your work, this type of insurance helps ensure that a sudden mishap won’t disrupt your business or drain your finances.

How much does freelancer insurance cost?

On average, freelancers can expect to pay anywhere from $240 to $1,200 per year for insurance. The exact cost depends on factors like your industry, the specific coverage you need, and how much risk is involved in your work. If you require commercial auto insurance coverage as part of your freelancer insurance coverage, then you will likely pay more.

Keep in mind that this range is just an estimate and will not be relevant to all freelancers in Canada. Each business is unique, so it’s best to get a personalized quote from an insurance provider to gain an accurate understanding of cost.

What factors determine your freelancer insurance premiums?

Several factors go into determining how much you’ll pay for freelancer insurance:

• Industry: High-risk industries like construction tend to have higher premiums than lower-risk fields like consulting or design.
• Claims history: If you’ve made claims before, your rates might be higher.
• Coverage limits: The more coverage you need, the more you’ll pay.
• Location: Where you work can impact costs—some areas are more prone to risks, like floods or theft.
• Experience: Freelancers with more experience might pay less than those just starting out.
• Contents value: The value of your equipment will impact premiums. The more your insurer has to protect, the more they’ll charge you to protect it.