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There are a number of benefits and downsides to freelancing, and everyone chooses for himself whether or not to go for it. This article does not analyze pros and cons of such a decision or help to make a choice between being an office employee or a freelancer. It is assumed that you are already a full-time freelancer and now seek substitution for paid health insurance benefits, or want to find out the ways you can protect yourself as a professional. In this article we'll touch upon the question of obtaining health insurance coverage, professional indemnity insurance and business liability for freelancers.
One of the most common reasons many Americans won't quit their full-time job in order to pursue freelancing is the company health plan they had when working in the office. Many freelancers have chosen self-employment only because they could rely on spouses with regular jobs, where employer-sponsored health insurance coverage was provided for the entire family. However, there are several solutions which can keep you covered even if you have no more backing of your employer.
Consider the following options for finding health insurance outside a company and do your own research before you settle on a plan. Explore health insurance plans and rate quotes online. Get quotes on health insurance coverage through independent agents. Shop around and ask for references in order to find the most reputable insurance broker in your area. An insurance broker will deal with insurance companies on your behalf trying to find the best deal for you.
You can join a union, guild or an independent contractors association in order to get group rates and other group health insurance benefits. For instance, there is the National Association for the Self-Employed (NASE), which provides discount cards through their benefits plan. Also, explore the option of high risk health insurance pools.
If you are leaving your full time job with a company health insurance plan in order to become a freelancer, consider a COBRA option and check with your employer if it is possible to keep your health plan and how much you will have to pay for it now. Cobra (Consolidated Omnibus Budget Reconciliation Act of 1985) allows people to keep their company health benefits for 18-36 months. This period may be cut off in case premiums are not paid timely, or if your former employer terminates the plan.
It can also be extended under some circumstances, for example, due to long-term disability.
Freelancers may also opt for getting health insurance from their local Chamber of Commerce, which offers small business group packages and individual plans for those who are self-employed.
You can also get lower monthly premiums at the expense of a higher deductible. You will have to pay the first $5,000-$10,000 of medical bills before the insurance company starts paying the bills. It sounds expensive but choosing between having to pay a $5,000 deductible and having to pay a full $40,000 in medical bills, the decision is obvious.
Being a freelancer involves certain obligations and responsibilities. Some professions carry more responsibilities than others and in many cases the necessity of insurance is beyond any doubt. By a definition, freelance insurance is a specialized form of insurance which provides financial protection to professionals working as freelancers.
Liability or Professional Indemnity is very important if you can be sued for breach of professional duty, breach of copyright, libel, or slander. Talk with an insurance agent who specializes in this specific area of protection. In a number of areas Professional Indemnity Insurance is getting indispensable today to support your independent status. Creative professionals, editors, interior designers, writers and photographers should seriously consider obtaining Professional Indemnity coverage.
Customers now often ask to see proof of Professional Indemnity Insurance before having any business with you. If your client suffers a financial loss as a result of alleged mistakes or omissions on your part, he or she may sue you. Professional Indemnity Insurance is meant to meet the cost of defending claims made against you. With sufficient coverage, the private assets of freelancers will remain unaffected.
Consider the following types of Business Insurance: business liability, business interruption coverage and property coverage.
Business Liability provides protection from the compensation claims of the third party against personal injuries or damages to the property. Business interruption or key person coverage is necessary in case you are unable to meet your business commitments due to an injury or disability. This coverage will help you with loan payments and fixed business expenses for the period of time when you are recovering. If you use your home as an office, you may need Property Insurance, which may take the form of adding your business equipment onto your homeowner's or renter's insurance. In case you use your car for business purposes, consider insuring this use as well.
Some independent contractors and freelancers still consider that if the business is small and relationships are informal, insurance is abundant and certain rules and legislation may not apply to them. This is not true and in order to avoid serious problems, it is vitally important to ensure that your business practice operates within the law. Freelance Insurance is becoming an essential part of freelancing practice, and provides freelancers with an opportunity to work efficiently in comfortable, stress free environment.