An accident can happen in the blink of an eye, but it can have significant consequences for you and your business. As soon as you start working as a freelancer, you become liable for the damages you cause. Therefore, liability insurance for businesses is crucial for every freelancer.
What is business liability insurance exactly?
The name says it all: Business Liability Insurance (BLI) is an insurance policy for causing damage to others. When you, or one of your employees, cause damage to another company or individuals, you as a freelancer may be held liable. With liability insurance, you protect yourself against claims for damages. For example, if you cause fire damage to a client’s property or accidentally knock something over. Even if a passerby trips over a loose cable belonging to you and gets injured, you are covered with business liability insurance (BLI). The liability insurance, therefore, covers the costs resulting from such damages.
What does liability insurance cover?
Covered Not Covered
Damage caused while performing work and by products you sell. Damage to products you sell.
Damage to someone else’s property that you rent or use. Damage to personal belongings not related to your business.
Injury suffered by an employee during work. Damage caused intentionally.
Damage or destruction of the client’s products. Financial loss.
Liability insurance for freelancers in the construction industry
In the construction industry, you face risks that you need to adequately cover. If you undertake major construction projects, we strongly recommend ensuring you have sufficient coverage because not all damages are included in a standard business liability insurance policy.
With a Construction All Risk (CAR) insurance, you also cover the damages you may cause to the work itself. Also known as a Construction and Erection insurance, this policy provides additional security for freelancers working in construction. The CAR insurance provides coverage for damages to new construction or damages occurring during construction or renovation.
Is it mandatory for freelancers to have liability insurance?
It is not legally required to have liability insurance as a freelancer. However, liability insurance is almost indispensable. It can have significant consequences if you unexpectedly cause damage.
