As the U.S. workforce continues to migrate from traditional, onsite employment locations to jobs as remote and contract employees, the gig economy has emerged as a new, flexible and short-term type of work. Recent statistics show roughly a third of US workers are part of the gig economy. As a result, benefits and protections that come with regular full-time employment, such as life and health insurance, unemployment insurance, paid vacation or days off and minimum wage protection are not available in the gig economy. In addition, gig workers may face more significant risks than typical employees because their employer's insurance does not cover them.
Keep reading to learn more about gig insurance and whether you need it, how it works and the sorts of workers it protects.
Compare Gig Economy Insurance
Gig workers need quick and flexible insurance coverage. Benzinga has compiled a list of the best gig insurance providers to help you get started finding the right policy for your unique work situation.
What is Gig Insurance?
Gig insurance is a combination of policies designed to offer protection for temporary, part-time, offsite or contract workers who do not enjoy the employee benefits offered to traditional onsite employees. Keep in mind, some people may not feel as though they are “gig” workers because they hold relatively traditional “office” style jobs. If you do a job that normally brings you to an office and in contact with benefits, but you don’t have those benefits, you’re technically a gig worker.
What Types of Gig Workers Need Insurance?
As the gig economy expands, it's more vital than ever for gig workers to understand what kind of insurance they require. But, unfortunately, many people are so enthralled by the possibility of being self-employed or having greater control over the gig roles they choose that they overlook the insurance aspect.
Here are some examples of non-traditional workers who might benefit from gig insurance.
- Ride-sharing drivers
- Personal shoppers
- Secret shoppers
- Dog walkers/pet sitters
- Freelancer photographers
- Graphic designers
- Creative entrepreneurs
- Blog or website managers
- Classical dancers, singers, and instrumentalists
What Should Gig Insurance Cover?
If you are a gig worker, you won’t have the insurance benefits of a traditional employee. However, whether you are insuring just yourself or a gig-style business, you will need access to insurance coverage designed to meet the unique needs of the gig workforce.
Here are some types of gig insurance to explore further:
Health insurance: To get health insurance as a gig worker, you must buy your own plan. Do not forget to look at your state's health insurance exchange when you're looking for a good deal. The Affordable Care Act (ACA) set up exchanges to help more people get health insurance. You may also be able to get a tax break that will help you pay less for your insurance each month.
Disability insurance: The idea of being unable to work and support your family as a self-employed or gig economy worker may seem unthinkable, but short-term or long-term disability may be more prevalent than you think. Therefore, disability insurance is a welcome safety net.
Business auto insurance: Your personal auto policy does not provide coverage when you use your personal vehicle for business. Purchasing a business auto policy may be a good choice.
Professional liability: Accidents that occur while working as a gig worker may be excluded from your personal insurance. For example, say you work as a delivery driver and inadvertently damage property while on the job. Since you are working in a professional capacity, your personal insurance does not pay for professional liability claims. However, when you perform a gig job, you work as a business. That is why it is recommended that you consider professional liability insurance.
Life insurance: Have you considered what might happen after you die? Are you married or a single parent? Your unexpected death may burden your family financially. While you might not be able to afford a costly whole life policy as a gig worker, term life insurance is a reasonable and straightforward way for gig workers to protect their loved ones. If you die while your insurance is active, your beneficiaries will receive a death benefit payment. Term lengths can range from 10 to 30 years. Regardless of your age, your family may need life insurance to cover medical, burial and estate expenses.
Accidental death and dismemberment (AD&D) insurance: Accidental death and dismemberment (AD&D) insurance covers unintentional death or dismemberment of the insured. Gig workers can usually add it to their health insurance for a minimal additional premium cost.
Gig Insurance for Businesses
Perhaps gig workers are a new option you are exploring for your company, and you haven’t quite thought about insurance options for these workers yet. If you have a gig workforce, you might want to consider the following types of insurance.
General liability insurance: This policy protects you against the hazards that might arise in practically any firm, regardless of your industry. For small businesses and self-employed professionals, it is the most common type of insurance to obtain, and it is frequently the initial coverage purchased. The reason for purchasing general liability insurance before purchasing other coverage is that it provides financial protection if you are legally liable for some of the most common accidents in a business, such as a client injury or property damage.
Workers compensation insurance: Workers compensation insurance can help pay for medical treatment, lost wages and other costs. Many people think only businesses with employees need workers comp. Still, many people who work for themselves, as sole proprietors or as independent contractors buy insurance to protect their financial interests or meet contract requirements from their clients.
Professional liability: An insurance policy for freelance or contract workers known as errors and omissions coverage or professional liability insurance may be a suitable option for protection in the event of a lawsuit against you. Proof of professional liability insurance can help customers feel comfortable about hiring you, knowing that they are protected against damages caused by your negligence. Each state has its own licensing requirements for professional liability insurance.
Do You Need Gig Insurance Protection?
The gig economy segment of the workforce does not have access to the same insurance protection as the traditional workers. Therefore, as a freelancer or gig worker, you must take it upon yourself to ensure that you have the suitable types of gig insurance to keep yourself protected.
Frequently Asked Questions
Are gig workers insured?
Gig workers enjoy flexible work schedules and other benefits. However, gig workers can’t count on traditional benefits like employer-provided insurance. Therefore, if you are a gig worker, you will have to search out your own insurance options.
What are the benefits of the gig economy?
The gig economy, which offers employees short-term employment to supplement their income, is one of the most significant trends affecting the workforce in recent years. Many Americans who were laid off, furloughed or worked fewer hours as a result of COVID-19 now have job prospects. In addition, gig employees enjoy flexible work hours and can often work from home.