Are you one of the 16.5 million American workers in an “alternative work arrangement”? Some call it freelancing, others consider themselves independent contractors, consultants, or self-employed… whatever label you wear, you’re a part of the gig economy.
Gig work consists of income earned outside of a traditional, long-term employee/er relationship.
Gig workers are designing websites, writing, driving ride-share vehicles, running errands, delivering meals and groceries, consulting, and so much more. While most gig workers report high satisfaction with their arrangements - citing more control over their work and more flexibility in their hours - gig work also comes with unique challenges.
Its estimated that only about 18% of gig economy workers have insurance to cover their independent, freelance, or contract work, according to research by Cake&Arrow.
Gig workers typically fit into one of two categories: virtual workers or physical workers.
Each of these categories comes with it’s own set of risks - and a different set of insurance needs.
3 Insurance Policies that Benefit Virtual Workers
Virtual workers tend to make internet-based income. This group of gig workers includes web designers, developers, writers, marketers, and consulting professionals.
Virtual workers tend to be more concerned with a loss of income over loss or damage to personal property. Which is why they can benefit from liability policies, such as:
General Liability
When you’re writing, designing, and providing marketing services for your clients, you could easily - albeit unintentionally - run afoul of a competitor.
The logo you designed may closely resemble another businesses’ logo. The web copy you wrote may not be unique enough. The Tweets you posted for a client could be misconstrued as a hurtful attack by a competitor.
General liability insurance is designed to cover third-party damages and injuries, including claims for advertising injuries or slander/ libel lawsuits.
- Advertising injuries coverage: protect yourself against lawsuits for false advertising, copyright infringement, trademark infringement, and more.
- Slander and libel coverage: protect yourself against slander (defamatory statements that are spoken) or libel (defamatory statements that are written) lawsuits.
General liability insurance may help you pay for attorney’s fees, court costs, settlements, or judgments that arise from one of these types of lawsuits, protecting the income you’ve worked so hard to earn.
Professional Liability
What happens if your work causes a financial loss for your clients?
It can happen. A design error or development mistake could lead to days of downtime and lost income for an e-commerce client. Maybe your client followed your consulting advice step-by-step, yet didn’t see the increase in business that you promised.
Professional liability insurance (also known as errors and omissions or E&O coverage) is designed to protect you in the instance of a lawsuit arising from a disgruntled client who believes your errors have lost them money.
Even if the accusation isn’t true or a lawsuit is frivolous, the cost of defending yourself can add up fast. Professional liability can help cover the costs of attorney’s fees, court costs, and any resulting settlements or judgments if you’re sued.
BOPs
For gig workers who want the protection of multiple different policies at an affordable price, BOPs (business owner policy) can offer great protection and cost-savings benefits.
BOPs typically cover many common business risks, including:
- property damage
- liability coverage
- business interruption
Business interruption coverage can offer an extra layer of protection for gig workers beyond what more common insurance policies do. This coverage is designed to cover lost income if you have to stop your business activities due to an unexpected event. The coverage can include lost income, normal operating expenses, or the cost to relocate to a different work location.
Not every event is covered by business interruption coverage – like if you get sick for a few weeks and can’t work – but many are. Talk to your insurance agent about the different ways business interruption can cover your gig work.
3 Insurance Policies that Benefit Physical Workers
The construction industry has the highest percentage of gig workers; almost a quarter of all construction workers are working as an independent contractor.
These gig workers are considered physical workers, those who earn their income from either physical labor or physical property. Physical gig workers can also include rideshare drivers and home share owners.
Physical gig workers tend to seek out insurance policies that can protect their property and physical assets, including:
Inland Marine
Contractors often take expensive tools and equipment from one project site to the next just like photographers transport their equipment from shoot to shoot. When this sort of moveable property leaves the protection of a specific, covered location it’s open to risk of theft, damage, and loss.
Inland marine coverage protects:
- property in transit - a photographer’s equipment en route to a shoot
- property that stays in a fixed but movable location - equipment inside a food truck
- property that moves around - a contractor’s tools and equipment
Commercial Auto
The rise of the rideshare economy has left many drivers with auto coverage issues that are confusing at best. The personal auto insurance that you have typically doesn’t cover any kind of “drive for hire” activities. And insurance provided by rideshare companies may leave you with coverage gaps.
Commercial auto policies are intended to protect you when you use a vehicle for business purposes. Because of the increasing popularity of rideshare driving as a full- or part-time profession, more and more insurance companies are tailoring commercial auto policies specifically to the needs of these gig workers.
General Liability
No matter what your business is, there’s always a chance that something could go wrong and result in bodily injury or property damage to another person.
General liability insurance covers claims for third-party property damage or bodily injury, which is why it’s considered the cornerstone policy of any commercial insurance protection.
If you spill your coffee all over a client’s laptop during a coffee shop meet-and-greet… or accidentally back your car over someone’s brand new mountain bike while delivering groceries… or if your client trips over your briefcase and breaks an ankle during your pitch….you’ll be glad you’ve got general liability in place.
Every day, more and more workers start making a living in the gig economy. With the right insurance policies in place, you can be sure that you’ve got the best of both worlds: control over your work, flexibility in how you do it, and the security of insurance to protect your hard-earned assets, too.