Why Insurance Matters When You’re Your Own Boss

Why You Need Multiple Types of Insurance as a Freelancer

Being your own boss offers benefits like flexible hours, the freedom to choose your projects, and the ability to work from anywhere.

But this autonomy comes with a responsibility that is often overlooked: the lack of protection that typically comes with traditional jobs—especially when it comes to insurance.

By giving up a traditional full-time job with benefits, freelancers also lose access to basic types of insurance.

In this article, we’ll explore why insurance is a fundamental part of the professional life of anyone who works independently.

The Absence of a Corporate “Safety Net”

Unlike traditional employees who generally receive benefits from their employers, independent workers are fully responsible for covering their own protection.

This includes everything from medical care to coverage for lawsuits or financial losses—all of which are common in the everyday reality of work.

A simple trip to the emergency room can exceed a thousand dollars. Accidents, illnesses, or any unexpected event that prevents you from working can have immediate and serious financial consequences.

Without income protection or disability insurance, a freelancer can be left completely unprotected in such situations.

Essential Types of Insurance for Freelancers

Health Insurance

This is the most basic and essential type of coverage, with several ways to enroll—such as through the Affordable Care Act (ACA) Marketplace, directly with insurers, or through professional associations.
Some states offer income-based subsidies, making coverage more affordable.

Tip: Freelancers should be aware of enrollment periods and consider high-deductible plans, which have higher out-of-pocket costs but lower monthly premiums.

Disability Insurance

This insurance covers part of your income if you become temporarily unable to work due to health issues—something that can happen to anyone.

It’s especially useful for those who depend heavily on their physical ability to work, such as delivery drivers, rideshare workers, manual laborers, creatives, and freelance technicians.

Professional Liability Insurance

If you provide services—like consulting, design, marketing, or software development—this insurance can protect you from lawsuits by dissatisfied clients, professional mistakes, or claims of financial loss caused by your work.

Understand that in large companies, this kind of coverage is standard—and it should be part of your freelance life as well.

Equipment Insurance

For professionals who rely on expensive gear—such as photographers, videographers, musicians, or technical service providers—this type of insurance protects your tools from loss, theft, or damage.

Life Insurance

Often overlooked, life insurance is crucial for freelancers with dependents. It provides financial security to children or partners in the event of unexpected death.

Commercial Auto Insurance

If you use your vehicle for work (for example, as a rideshare or delivery driver), personal auto insurance may not cover work-related incidents.

A commercial auto policy covers those situations and is required on many gig platforms.

The Cost of Being Uninsured

Working independently can bring more freedom—but it also means greater exposure to risk, especially when you rely solely on yourself.

Without a proper insurance plan, a single setback can jeopardize everything.

An accident that sidelines you for weeks, an unexpected lawsuit from a client, or a hospital stay that leads to thousands of dollars in medical bills—any of these could derail your career and finances.

Beyond immediate costs, not having insurance can limit your opportunities. Many companies, for instance, only hire freelancers who carry professional liability insurance.

Tips for Choosing the Right Insurance

1. Evaluate your actual risks:
If you rely on a computer and internet connection, equipment insurance and health insurance should be priorities.
If your work is physical—like a delivery driver or electrician—disability insurance may be more urgent.

2. Compare plans carefully:
Use tools like Healthcare.gov or insurance comparison websites, or speak with specialized brokers. Be cautious with very cheap plans—they may not offer the protection you need.

3. Consider packages or associations:
Some professional associations offer insurance bundles at more affordable rates for freelancers and self-employed individuals.

4. Review your coverage annually:
As your income, lifestyle, and needs evolve, your insurance coverage should be updated accordingly.

Written by

Gabriel Gonçalves