You wouldn't drive a car without it being covered by an auto insurance policy or own your own home without a homeowner's insurance policy to protect it. As a freelance writer, however, there's a good chance you're working without a business insurance policy to protect you when times turn tough. Many freelance writers go without business insurance because they either have no clue it exists or they think they don't need it.
Business insurance is something that no freelance writer should go without. The following offers three good reasons why you should invest in business insurance sooner rather than later.
It Can Protect You in the Event of a Lawsuit
One of the risks of working as a freelance writer is becoming the subject of a lawsuit from an unhappy client. It's not unusual for freelance writers to stumble into a libel lawsuit due to a misunderstanding, misquote, or inaccurate information that was ultimately published. Such lawsuits can be financially devastating, and if you don't have the right insurance, you may be faced with the prospect of filing for bankruptcy just to cover the staggering legal costs that are common with many lawsuits.
Simply put, you'll need a way to protect yourself against any legal challenges brought forth by your clients. Business insurance policies often include liability coverage that shields policyholders from the expenses associated with these and other types of lawsuits. Instead of shouldering the financial risks on your own, your insurance company will work to reduce your exposure and keep your business going.
It Covers What Your Homeowner's Insurance Doesn't
Your homeowner's insurance policy covers a lot of things, but there's a good chance it doesn't cover your home office. In fact, most homeowner's insurance policies specifically exclude home-based businesses from their coverage. Others may provide severely limited coverage for your home office equipment, which could be problematic if the value of your business property exceeds the amount of coverage made available. In other words, your home office may not have the protection it needs in case of a fire, robbery, or any other catastrophic event that damages or destroys your equipment, files, or furniture.
This is where business insurance comes into play. Instead of relying on a homeowner's insurance policy that lacks coverage for your business assets, you can protect your home office with a business insurance policy that's specifically tailored to your needs. If your home office is burglarized, for example, you'll be able to replace computers, printers and any other office equipment that was stolen or damaged.
It Protects You If Your Business Is Interrupted
Natural disasters can have a devastating impact on any business, especially a small freelancing operation. Take Hurricane Sandy, for example. Between 60,000 and 100,000 small businesses were negatively impacted by the 2012 Atlantic superstorm. The U.S. Chamber Foundation's Business Civic Leadership Center predicted that up to 30 percent of those businesses would likely fail due to that impact.
A business interruption insurance policy can provide the cushion your freelance writing business needs to survive in the aftermath of a severe storm, flood, or any other type of natural disaster. Instead of being forced to stop work and shut down, business interruption insurance allows you to continue your operations while picking up the pieces.
These policies work by covering ongoing expenses that could prove a struggle to handle while your income stream is temporarily interrupted. These expenses include rent, taxes, telecom services, utilities, and maintenance, just to name a few. The amount of coverage you can benefit from usually depends on your prior income, among other factors. In short, business interruption insurance can help your freelance business stay afloat even in the face of a temporary loss of income.
For additional information, contact a company that offers business insurance services.