Protecting Your Freelance Business

Everyone makes mistakes; we’re all human. But in the professional world, even minor slip-ups can take a costly toll if you’re unprepared—even if the cause is something you couldn’t have anticipated.

Many business owners find the protection that comes with a good liability insurance plan is far more affordable than the cost of doing damage control when something goes awry. As a business owner, there are also other steps you can take to minimize the risk to you and your business.

Wondering where to start? These articles from the Hiring Headquarters—Upwork’s resource for businesses, freelancers, and entrepreneurs—are a great place to start.

Why Freelancers Benefit from Liability Insurance

Freelance projects don’t always go as planned. Sometimes the impact is limited, but at other times, the consequences of issues like equipment failure or miscommunication can be significant—for you and your client.

That’s where liability insurance comes in. Paying a monthly premium can give you vital protection if a client ever initiates a lawsuit or seeks compensation.

“Liability Insurance 101: Why Freelancers Need Protection” outlines the importance of having this protection in place and how it can be beneficial to freelancers. It covers several key bases, including the nuances of what liability insurance entails and the steps to setting it up.

The piece recommends doing thorough research when seeking insurance, and suggests asking numerous questions before deciding on a plan, including:

1) What are the coverage boundaries? Understand which situations a given plan will or will not cover, and what types of exceptions might be in place.

2) What’s the deductible? Always remember to ask how much, if anything, you have to pay above and beyond your monthly premiums before the insurance company will cover the remainder of a claim.

3) How do claims work? It’s also good to familiarize yourself with the process of working through a claim, what that entails, and how much support is available should you need it.

Minimize Your Risks Early-On

Liability insurance can help protect you from many types of unexpected situations, but what about some of the other inherent risks that come from running a business?

From how you manage money to how you classify your operation, a little careful planning early in your businesses’ life can help ensure your continued future success as an entrepreneur. Knowing the most common stumbling blocks that trip up new business owners will help you avoid them in the long run.

“7 Ways to Make Your Startup Less Risky” identifies key areas that can cause problems for news business owners and outlines tips to help you avoid stumbling over these common pitfalls. The article explores how these challenges can affect your business, while suggesting ways to reduce their impact in the long run. Additionally, it’s full of links to useful resources for any business owner seeking to create a strong, stable foundation to build on in the future.

Here are three of the top risk-reducing suggestions:

1) Set aside enough for taxes. Many experts recommend business owners set aside roughly 30 percent of every incoming check they receive. This helps to create a financial buffer so you can pay your quarterly estimated taxes without the temptation to spend it before you need it.

2) Keep your debt in check. Avoid scaling up too quickly if you don’t have the income to support it. Whenever possible, it’s always smart to build a cash reserve savings buffer and keep your loans to a minimum.

3) Take care of yourself. What sounds like an obvious no-brainer is actually something many busy entrepreneurs tend to neglect when they’re hyper-focused on maintaining and growing their business. Without setting aside proper time to keep your physical and mental health in good shape, your business and personal wellbeing can falter.

To learn more about how to protect and expand your business, check out the many expert insights and helpful articles over at the Hiring Headquarters.

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