Quick answer
The two policies cover different risks:
- General liability (GL) covers bodily injury, property damage and advertising injury claims from third parties. Think a client tripping over your camera bag.
- Professional liability (PL), also called errors and omissions (E&O), covers claims that your work or advice caused a financial loss. Think a missed deadline or a coding error that costs a client money.
Most service freelancers face more professional risk than physical risk. Many clients require one or both in contracts. Across Insureon’s small business customers, general liability averages about $45 a month and professional liability about $88 a month. Your price depends on your field, location, limits and claims history.
Side-by-side comparison
| General liability | Professional liability (E&O) | |
|---|---|---|
| Covers | Injury to others, damage to their property, libel and slander in ads | Negligence, mistakes, missed deadlines, failure to deliver |
| Example claim | Client trips on your cable during a shoot | Client says your ad copy error caused lost sales |
| Who needs it most | Freelancers who visit clients or host them | Consultants, designers, developers, writers, marketers |
| Average cost (Insureon customers) | About $45/mo ($538/yr) | About $88/mo |
| Often required by | Landlords, venues, corporate clients | Corporate and enterprise clients |
| Policy form | Usually occurrence-based | Usually claims-made |
Neither policy covers your own injuries, your own equipment, or intentional wrongdoing.
General liability: what it covers
General liability pays legal defense and damages when a third party claims your business caused:
- Bodily injury: a client is hurt at your studio or at a site you are working
- Property damage: you spill coffee on a client’s laptop or scratch their floor
- Personal and advertising injury: a claim of libel, slander or copyright issues in your ads
A business owner’s policy (BOP) bundles general liability with commercial property coverage for your equipment. Insureon customers pay about $83 a month on average for a BOP.
Professional liability: what it covers
Professional liability pays defense costs and settlements when a client claims your services caused them a financial loss. Common triggers:
- A design or code error that leads to lost revenue
- Missed deadlines that cost a client a launch
- Advice that turns out to be wrong
- Claims you did not deliver what the contract promised
Most PL policies are claims-made. You must have active coverage when the claim is filed, not just when the work was done. If you cancel, ask about tail coverage or prior-acts coverage when you switch insurers.
Which freelancers need which?
| Freelancer type | GL | PL | Other coverage to consider |
|---|---|---|---|
| Web developer, designer | Sometimes, for client sites | Yes | Cyber liability |
| Writer, marketer | Rarely alone | Yes | Media liability |
| Consultant, coach | Sometimes | Yes | Cyber liability |
| Photographer, videographer | Yes | Often | Equipment coverage, BOP |
| Hair stylist, trainer, trades | Yes | Depends on field | Professional or malpractice coverage |
Check your client contracts. They often specify required policies and limits, such as $1 million per claim, and may ask to be named as an additional insured.
Worked example: one mistake, two policies
Theo, a freelance developer, builds a checkout page for a client. A bug breaks payments for a weekend. The client claims $40,000 in lost sales and hires a lawyer.
| Policy Theo holds | What happens |
|---|---|
| General liability only | Likely no coverage. No injury or property damage occurred. |
| Professional liability | Insurer handles defense and any settlement up to the limit, after Theo pays his deductible |
At average rates, carrying both policies costs about $538 + $1,056 = $1,594 a year. Premiums for business insurance are a deductible business expense on Schedule C. See Self-Employed Tax Deductions: The Complete List.
Other policies freelancers consider
- Cyber liability: covers data breaches and some ransomware costs. Useful if you handle client data. Insureon customers pay about $129 a month on average.
- Workers’ compensation: required in most states once you have employees. Some freelancers buy it because clients require it.
- Commercial auto: personal auto policies may exclude business driving, especially deliveries.
- Equipment or inland marine coverage: protects cameras, laptops and tools you take on the road.
Does an LLC replace insurance?
No. An LLC can separate business debts from personal assets in many cases. It does not pay a lawsuit’s defense costs, and you can still be personally liable for your own professional negligence. Insurance and an LLC work together. See Sole Proprietorship vs LLC for Freelancers.
How to buy coverage
- List your risks and contract requirements.
- Get quotes from several insurers or a broker. Online marketplaces can quote many carriers at once.
- Compare limits, deductibles and exclusions, not just price.
- Consider bundling GL and property in a BOP.
- Pay annually if the insurer offers a discount.
- Review coverage yearly as your income and client list grow.
Frequently asked questions
Is business insurance required for freelancers?
Usually not by law, unless you have employees (workers’ compensation) or work in a licensed field. Clients and landlords often require it by contract.
Does homeowners or renters insurance cover my business?
Usually only in a limited way, if at all. Business equipment and client claims are often excluded. Ask your insurer or add business coverage.
What is a certificate of insurance?
A one-page summary of your policies that clients request as proof of coverage. Insurers issue them for free, usually online.
Are insurance premiums tax-deductible?
Yes. General liability, professional liability and other business insurance premiums are deductible business expenses.
This article is general information, not legal, insurance or tax advice. Prices and rates change often.
Related guides
- Best Accounting Software for Freelancers and Self-Employed (2026)
- Best Tax Software for Self-Employed (2026)
- Best Business Bank Accounts for LLCs and Freelancers (2026)
- QuickBooks Self-Employed vs FreshBooks vs Wave (2026)
About this guide
Written by the Freelancer Tax HQ editorial team, based on our professional experience, official US government sources (IRS, SSA and other agencies) and reputable informational articles listed in the sources below. Last reviewed on . Tax rules change often, and we update this guide when they do. Read our editorial policy or report an error.
Sources
Insureon: Small business insurance costs; IRS Publication 334, Tax Guide for Small Business. Example figures are FreelancerTaxHQ illustrations.