Freelance boom: why brokers should dive into this growing market

Freelance boom: why brokers should dive into this growing market | Insurance Business Canada

Professional Risks

Freelance boom: why brokers should dive into this growing market

How to tailor insurance for today’s dynamic workforce

Professional Risks

By
Nicole Panteloucos

Contrary to recent trends of “quiet quitting”, where disengaged employees aim to do the bare minimum, it seems Canadians are working more than ever. The rise of remote work following the pandemic has transformed the workforce, leading many to embrace the gig economy. In 2022, around one million Canadians were juggling two or more jobs – think web developers getting into yoga instruction or accountants taking on wedding photography.

Reflecting on this shift, Kris Giddy (pictured above), managing partner at Mitch Insurance Kingston, noted: “With businesses shutting down and the work-from-home trend taking off, people had more time on their hands and needed to get creative with their downtime.”

This trend has continued beyond the pandemic as well, with over 2.5 million Canadians self-employed as of last year, making up 13.2% of the workforce. With side hustles contributing an additional $15,430 per year to Canadians’ incomes, it’s crucial for insurance brokers to capitalize on this booming market.

Traditional policies may not cover all the risks freelancers face, creating an opportunity for brokers to offer tailored protection that ensures clients can work with confidence and peace of mind.

Protect against the risk of professional liability

Whether your client does consulting, web development, or social media management, it’s crucial to safeguard them against unforeseen issues that could disrupt their work. “If your client is hired for a specific project with a deadline and they miss it for any reason, they could face a lawsuit,” warned Giddy.

Since many freelancers work from home, brokers should be aware that standard home insurance policies often provide minimal coverage for business contents (computers, office equipment, furniture, inventory, and business supplies) and may even exclude them altogether.

A separate freelance insurance policy is essential to cover key risks including:

Professional liability: Protection against mistakes or missed deadlines that could lead to lawsuits.
Business contents: Coverage for damage or theft of business assets like computers and office equipment.
Cyber risk: Safeguards against losses from cybercrime and provides access to technical support for data breaches.
Commercial auto insurance: Protection for personal vehicles used for work-related purposes.

Adapt coverage to your client’s unique risk profile

The expanding freelance insurance market now offers tailored coverages for a wide range of roles, from yoga instructors, to tutors and personal trainers.

To fully leverage these tailored options, Giddy advised brokers ask detailed questions about their clients’ businesses to understand their unique risk profiles, as freelancers often juggle multiple roles. For example, a client might be involved in web development and consulting, each requiring distinct coverages.

“When it comes to freelancing, clients might operate in various industries and take on multiple roles within those industries. It’s crucial to pinpoint their specific operations and exposures to provide a customized insurance solution,” confirmed Giddy.

 “If your client has any business equipment or tools for their role, you need to ensure they are included in the policy as well,” he added.

Tips for brokers on selling freelance insurance solutions

Aside from gaining a firm understanding of a client’s business and risk profile, brokers can use the following tips to promote freelance coverage to relevant clients:

Understand the freelance landscape: Familiarize yourself with common freelance industries, such as graphic design, writing, consulting, and IT. Stay updated on trends and challenges freelancers face, like fluctuating incomes, contract disputes, and tech issues.
Highlight flexibility and affordability: Emphasize flexible policy terms that can adapt to changing workloads and income levels. Offer different coverage levels and payment plans to suit various budgets.
Network within freelance communities: Join and participate in freelance forums, social media groups, and local meetups. Offer free workshops or webinars on freelance topics to build credibility and attract potential clients.
Offer bundled coverage: Promote insurance bundles that cover multiple needs (e.g., liability, health, equipment) at a discounted rate. Show clients how bundling can provide better overall value and convenience.

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