Business Insurance
Thursday, 6 November 2008 @ 0:12It was recently suggested to me by an accountant that as a freelance designer, I should look into business liability insurance. I’m wondering what everyone else’s experience is for this– where would you even acquire such insurance, what would it cover, etc.?
It depends on how much work you are doing, what kinds of work you’re doing, and the size of the projects. I have had several accountants tell me that working as a sole proprietorship is stupid, period. I disagree. If you freelance full-time and it is your sole livelihood then I would probably get insurance. But, if it is your sole livelihood, I wouldn’t be freelancing; I would form an LLC. If you just freelance on the side then you’re probably not going to be able to afford insurance. Personally, I’d be more interested in the advice of an attorney than an accountant when it comes to business liability. Yes, there is a certain level of risk freelancing as a sole proprietorship, but I believe that you can mitigate most of those risks with a good contract. Don’t hesitate to state in your contract that your personal assets (including your home) are not business assets and they are off limits from any disputes. I also would recommend always requiring half of the payment up front as a retainer.