General liability insurance is a foundational business policy. It protects you if a third party claims your work caused them bodily injury or property damage.
What is General liability insurance?
General liability insurance is a type of business insurance. It covers claims from clients or the public for physical injuries or property damage you or your business allegedly caused. For example, it could apply if a client trips over your equipment at their office.
Why is this important?
As a freelancer, you are personally responsible for your business risks. A single lawsuit for an accident could be financially devastating. This insurance provides a critical safety net, protecting your personal assets and giving clients confidence in your professionalism.
How does it work?
If a covered incident occurs, you file a claim with your insurer. They will investigate and, if valid, cover the costs up to your policy limits. These costs typically include legal fees, settlements, and medical bills for the injured party.
Pros and cons
Key pros include asset protection, client trust, and coverage for common accidents. The main cons are the ongoing cost and that it doesn't cover professional errors or your own damaged equipment. You must weigh the expense against your specific risk level.
Conclusion
General liability insurance is a smart investment for managing risk as a freelancer. It shields you from unexpected third-party claims that could otherwise cripple your business. Evaluating your need for it is a crucial step in building a resilient freelance practice.
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