Every year it seems that working as a freelancer is becoming more and more popular. More people are working remotely in general, and being a freelancer allows them to work on their own terms.
When you work as a freelancer, you may not realize, however, that there are risks that are the same for any business owner. Even if you’re working on your own, you are still a business.
Many freelancers don’t think they need business insurance in Tennessee or whatever state they live in, and if they get sued, they’re left personally responsible for losses.
At a minimum, as a freelancer, it’s a good idea to invest in professional liability insurance, which would pay for a lawsuit that was brought against you because of harmful or negative advice.
With that in mind, below we talk about some of the reasons that freelancers are most often sued, although, of course, the specifics can vary depending on the industry you work in.
Breaching Terms of Service
A lot of freelancers will work through freelance marketplaces. These marketplaces connect them with clients who are looking for the services professionals offer. It makes things convenient and accessible. It simplifies marketing and allows you to reach a much broader client base than you’d otherwise have access to.
The platform works as a middleman for each party, and then they take a cut of the financial transactions happening there.
The catch is that the terms of service may prohibit clients and freelancers from working outside of the platform.
If someone is caught violating the terms and conditions, they’d probably get a warning or maybe be prohibited from using the platform.
In the worst-case scenario, which is rare but always a possibility, a freelancer could be sued for breaching the terms of service.
When you work as a freelancer, you may be dependent on a wide variety of platforms to do your business, and you shouldn’t skip over their terms of service or updates made to them. Make sure you’re clear on exactly what they say.
Again, it would be pretty rare that you’d be sued over a breach of terms of service, but still, it’s something to be mindful of to protect yourself as a business owner operating as a freelancer.
Intellectual Property
Intellectual property gets very tricky, and it’s often something unintentional that could put you in a position of being liable.
You might, for example, create an article that’s similar to someone else’s, and you don’t give the proper credit.
Even if you create intellectual property, you could be sued for stealing it.
If you work as a software developer on a freelance basis, you could borrow code that you created, but you did so while you were working for another client. That client owns the code, and if the copyright belongs to them, you could find yourself in a challenging legal situation.
If you’re a writer or creator, there are plagiarism checkers you can use, but at the same time, it’s almost impossible to have 0% plagiarism just because of the sheer volume of content that’s online.
Breach of Contract
Getting sued for breach of contract as a freelancer is actually one of the most likely scenarios on this list.
If you do not agree with a client on a scope of work, for example, that client could potentially sue you if they don’t feel you delivered what you agreed on.
You’d try everything, of course, to avoid having a situation escalate to this point, but it does happen quite a bit.
The best way to avoid a lawsuit for breach of contract is to try and communicate openly and honestly from the start. If there’s part of your contract you don’t think you’re going to be able to adhere to, let the client know as soon as possible.
A Client Who Wants Their Money Back
It doesn’t matter if you work as a freelancer creating content or in any other industry; there are going to be times when disgruntled clients are your reality. They might want a refund.
This could again be a problem of communication. Maybe you did the work, but the client genuinely isn’t happy with it. You feel like you’re being taken advantage of because you put the time and effort in, but maybe the client feels like they are as well because they’re not going to end up using the work.
There are also situations where clients are simply impossible to please, or the client could be behaving in an intentionally unethical way.
Regardless of the specifics, you could be sued if someone demands a refund of a deposit or a full payment and you don’t agree to that.
Along with having insurance to protect yourself and being very careful about the clients you work with, you should save every communication you have with your clients.
It can be a good idea to avoid discussing things over the phone because then you don’t have a record of what’s being said. Those conversations that aren’t in writing could be where the debate comes in.
Export data into different formats
One of the LMS features often overlooked is exporting data into different formats. This might not seem like a big deal, but it can be a lifesaver when you need to share data with someone who doesn’t have the same LMS platform.
Exporting data into PDF, Excel, or CSV format means you can share data with anyone, regardless of what LMS they are using. This can be a huge time-saver and make your life a lot easier.
Errors
Even the most conscientious professional freelancer can make an error, and in rare, unfortunate cases, those errors can become lawsuits.
Maybe you’re a developer, and you accidentally entered a bug into the software you’re working on, or you entered the wrong information into a spreadsheet.
No matter how much care you take to avoid errors, if they happen, which is inevitable, you might face legal troubles.
Along the same lines, if you design software that has a flaw in its code and it allows a security breach, you could be liable.
Strong communication, outlining expectations upfront, and having good contracts in place are the best ways you can avoid the worst-case scenarios above.
Even if you do these things, though, there’s an inherent risk in doing business. That’s why it’s also a smart idea to think about having some sort of liability protection in the form of business insurance, just like other business owners do.
