Most professionals take insurance for granted but this isn’t the case for freelancers. As of 2022, 42 percent of freelance professionals lack health insurance. Furthermore, many freelancers don’t understand the importance of having business insurance, which is a very broad and troubling issue.
Ride-sharing and delivery service providers who work as independent contractors face various risks that the right insurance plan can cover.
If you’re considering this kind of gig, getting acquainted with the insurance options in advance will be a good idea.
The Gig Economy and Freelance Work Are Redefining Industries
In 2024, the number of gig workers is expected to increase by more than 30 million people, The Association for Entrepreneurship reports. In 2023, the number of gig workers reached 78 million, a sharp increase from the 43 million workers back in 2018.
Ride-sharing and delivery services play an important role in shaping the gig economy. The market is expected to grow by more than 40 percent in the period until 2028. By that year, the market value of ride-sharing is anticipated to reach 216 billion US dollars.
The benefits of being a part of the gig economy are numerous. People who have chosen to earn an income this way enjoy:
· The flexible work hours and scheduling options
· Ample work opportunities, even as the world is experiencing a cost-of-living crisis
· Very easy entry, you don’t need a lot of experience
· A perfect side hustle to earn some extra income
To make ride-sharing and delivery service gigs work, however, it’s important to treat those as an actual business. Considering freelance insurance is one of the first things you need to do, especially if you intend to offer such services in the long run.
The Importance of Insurance for Freelancers
Driving a vehicle to do a job is linked to certain risks. Getting into an accident is a typical consideration. Even if you are the most careful and punctual driver, you can still end up in a situation that damages your vehicle or causes injuries.
Some reports suggest that app-based driving services have contributed to a three percent increase in annual traffic-related fatalities. The number of accidents in cities where ride-sharing services are available has also been going up since the introduction of such gigs back in the 2010s.
Having insurance is vital to give you peace of mind and a safety net in those scenarios. Nobody wants to think about collisions, property damage, or serious injuries. These events, however, occur daily. They’re something you need to be prepared for.
Types of Insurance Coverage for Ride-Sharing and Delivery Service Providers
Several kinds of insurance make sense for those who choose ride-sharing and delivery gigs. A few of the essential options to consider include:
· Automobile insurance: Typically, ride-sharing and delivery gigs are excluded from a personal car insurance policy. Adding some rideshare coverage is the smart thing to do. This is a specialized type of coverage that will be essential whenever claim filing occurs. Not informing your insurance provider that you’re using your car to work and a failure to seek coverage for business purposes may leave you vulnerable and facing serious liability in the event of a car crash.
· General liability insurance: General liability insurance is a requirement for all drivers and depending on state legislative frameworks, there will be three different liability limits. These are bodily injury liability per person, bodily injury liability per accident, and property damage liability per accident.
· Professional liability insurance: This policy offers freelancers protection from claims alluding to errors, omissions, or professional negligence.
· Disability insurance: You will need this kind of insurance to enjoy protection from the loss of income stemming from permanent injuries or disability. Getting seriously hurt in a car crash, for example, could leave you incapable of driving. If this happens, you wouldn’t be capable of making a living as a ride-share or delivery service provider. The insurance coverage can be either short-term or long-term, depending on the plan you decide to get.
· Personal insurance: While this type of insurance isn’t directly related to the business you intend to start, it will give you much-needed protection. Don’t underestimate the importance of the most common types of personal insurance like life insurance and health insurance. Some companies even offer personal insurance packages that are tailored to the needs of freelance professionals. Getting a couple of quotes to compare the terms and conditions is always the best way to go.
Why Having Proper Insurance as a Freelance Professional Matters
If you’re young or you’re just getting started with a ride-sharing gig, you may feel that getting insurance is preparing for a worst-case scenario that may never come.
After all, the risk of being in a car crash or having someone suing you for negligence is minimal, isn’t it?
As a self-employed professional, you don’t have access to the types of coverage workers in a company are entitled to. Those who have been employed in the past will need to change their thinking and the way they plan for the future. Freelancers handle all financial aspects of running a business on their own. In the absence of enough insurance, an accident could mean the end of a career. It can also put you in a very difficult financial situation.
Having proper insurance as a freelancer or a gig worker is important because of the following reasons:
· You will safeguard your savings in the long run
· You’ll have access to financial resources in the case of an emergency
· Buying insurance as a self-employed professional can help you save on taxes
· You will get access to quality health assistance if you are ever injured while doing your job
· Insurance will give you reliable protection from liability claims that could otherwise end your career
· Having at least some business insurance protects you in the event of client disputes
Find Out More About Your Options
Entering a new professional field can be challenging. You’ll have many questions. Answering all those, especially the ones pertaining to finances, will involve hours of research.
Instead of wasting your time, consider getting in touch with the professionals.
If you’re wondering about freelancer and gig worker insurance options, get in touch with our team today. We’d be more than happy to guide you through the options and recommend tailored coverage that will give you security and help you focus on growing your business.
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