When it comes to insurance coverage for freelancers and independent contractors in the United States, the rules are pretty relaxed. However, this does not mean that you, as an Aidlancer, should be relaxed about insurance coverage.
Without any insurance coverage, you may be responsible for the cost of damages, injuries, and court expenses related to lawsuits. You also take on financial risk if your work requires expensive tools and equipment that could be lost, stolen, or damaged.
For optimum coverage, there are a couple of insurance options that you should consider to protect yourself, your client, their property, and your financial situation. In this article, we’ll cover some insurance options you should consider, what they cover, who they benefit, and why you may want them.
Liability Insurance
The first kind of insurance that an Aidlancer should consider is liability insurance. Liability insurance can be purchased from major providers who also cover automobiles and homes. It is often tax-deductible and can be written-off. Consult with a professional around tax time for help.
What Is Liability Insurance?
Liability insurance, or general liability insurance, covers you from costs relating to lawsuits caused by damage to property or injuries to another person. You may be familiar with this type of insurance if you also have auto insurance. Liability insurance in that context covers another driver’s property and injury costs.
In the context of freelancing, let’s say that an Aidlancer is hired by a client to fix a plumbing issue. While fixing the problem, something goes wrong, and there is flooding in the client’s house. The client may sue the Aidlancer for the damages caused by the flooding. In this case, liability insurance can help protect the Aidlancer.
Sometimes, these situations result from avoidable mistakes from Aidlancers, and sometimes, there is nothing you can do about it. Maybe you went to a client’s house to fix something, you laid down a tarp, and the client tripped over the tarp and broke their arm. That could result in a lawsuit as well.
It’s impossible to prepare for every potential mistake and dangerous situation. With just one accident, a contractor worker could be hit with a career-ending lawsuit, resulting in bills that they can’t afford and will have to pay off for years and years to come.
That’s why it’s a good idea to purchase liability insurance even if you’re confident in your skills and safety measures. The risk is not worth the consequences.
Is Liability Insurance Required for Contractors?
Liability insurance requirements vary by state in the United States. It also depends on the kind of work that an Aidlancer is performing. Liability insurance is most often required for those doing trade work like construction, plumbing, or electrical work. This is because there is a higher risk of damage or injury with this kind of work. The level of damage or injury can also be very high (ex: if a client were to be electrocuted because shortcuts were taken; if proper precautions were not taken before construction and the structure was damaged; etc.)
It is also recommended for anyone who offers digital services like an IT technician. Breaches in security can be costly, and an oversight on the part of the technician could mean that they are the ones responsible for the financial fallout.
Before taking any work, Aidlancers should look into requirements in their state to ensure they are fully covered. Even if your state does not require liability insurance, be aware that you can still be held liable for property damage or injuries. Though it’s not always required, it is always a good idea.
For Aidlancers who offer in-home services like cleaning, petsitting, or babysitting, liability insurance should be strongly considered. Just because the work does not seem dangerous doesn’t mean that there’s no risk of injury or property damage.
Aidlancers who perform services outside the home probably do not need to worry about liability insurance. If you’re running errands around town, picking up groceries, or delivering meals, you will spend little to no time on the client’s property or in their home. The chances of something happening are much smaller.
Personal Property Protection
For Aidlancers who will use their personal property to complete a task, personal property protection may be a good idea.
What Is Personal Property Protection?
Personal property protection is insurance that covers your personal belongings. You may already have this type of coverage in some form that is wrapped into your homeowners’ or renters’ insurance. It can cover the replacement costs or cash value of items that are stolen in a burglary or destroyed in a fire or natural disaster.
So how does this apply to Aidlancers?
Some Aidlancers may perform tasks that require costly equipment to be brought onsite. Specifically, any tools used for home repairs or landscaping could be covered by personal property protection insurance.
In the event that tools are destroyed or stolen, the Aidlancer is covered for the cost of replacing those items or is reimbursed for the value of the items.
Is Personal Property Protection Required for Contractors?
Personal property protection is not required for contractors. It is simply a way for Aidlancers to create safety nets. If completing tasks on Aider is the sole source of income or a major source of income, can you afford for your tools to be replaced out of pocket?
Without some sort of insurance to help you replace stolen or damaged items, you may not be able to cover the price of new tools. Not only are you spending extra cash to purchase these items, but you’re also losing income that you would have been bringing in had the items not been lost.
This type of insurance can greatly benefit those who use expensive tools in their work on Aider (e.g., plumber, mechanic, handyman, etc.). However, it does not apply to anyone who is performing tasks that do not require such tools and equipment (e.g., petsitting, house cleaning, personal shopper, etc.).
If you are or are considering becoming an Aidlancer, be sure to check your state requirements for insurance coverage. Even if your state does not require any insurance, take time to consider your situation. Can your work result in injury or expensive property damage? Do you have the money to afford these expenses if faced with a lawsuit? Are you able to replace all of your tools and equipment if something happens?
If the answers to any of these questions make you feel uneasy, consider insuring yourself against these risks. These types of insurance can also apply to other areas of private life, so the benefits go beyond freelancing as well. The benefits far outweigh the risks, so look into your coverage options today.
