• Finance

Avoid these common legal headaches

Working for yourself as a freelancer or solo entrepreneur provides freedoms and benefits unlike any other. You make your own schedule and work from anywhere. However, there are many legalities you must consider so you are not held legally or financially liable for things that could have been prevented. A new freelancer may not be aware of these issues, but this guide will help you on this path.

There are many legal issues to consider when freelancing and starting your own business. You will need to ensure that contracts, copyrights, and business registration are all in place should the unthinkable happen.


Contracts are legally binding between the client and the business. The standard contract will outline a variety of things, such as:

● Termination

● Ownership of ideas

● Copyrights

● Payment schedule

Contracts can range in content, as each business is unique and requires different elements to be considered. You may want to include your rates and consequences of nonpayment. The best way to determine what to include in a contract is to meet with an attorney and obtain legal advice. They can also draft up a contract for you to use. Or, you can use Freelancers Union's free contract creator tool to build a contract that reflects your business' needs.

Business Registration

One of the most important parts of staying protected is registering your business entity. This will also be important when it comes to taxes and insurance. You should also consider trademarking the name and other elements of the business entity.

You will need to ensure that the name you choose is not already trademarked or registered, as this can open you up to lawsuits if you choose a name that someone has already trademarked. They can essentially be compensated for your use of the name. There are two key options for registering your business: sole proprietorship or an incorporated business. The differences lie in the financial liability that each one carries.


Business insurance is crucial to your business operation, and there are many different options for you to choose from. The right insurance policy will depend on the type of work you are doing and the type of services you provide.

General Liability

The first type of insurance to consider is general liability. It is also one of the most important ones to protect you against common workplace accidents and more. This can also cover mishaps like spilling a drink on an expensive piece of tech. There are also other types of protections this policy has, such as against slander, libel, trademark infringement, and copyright infringement.

Professional Liability

This insurance covers potential claims against professional services. This covers professional errors like making a mistake on a project or delivering incomplete or late work. It can also cover negligence in work.

Cyber Liability

With the majority of work and client interactions taking place online, cyber insurance is a way to protect yourself against the risks that come with it. This insurance will focus on data breaches and will help to pay for notifying customers, forensic services, legal services, and business interruption expenses. It can also pay for customer credit and fraud monitoring services.

Personal Insurance

Being a freelancer or sole practitioner means that you do not have some of the same insurance options that you would have in a typical workplace. You will need to think about life and health insurance, as well as disability insurance. Home, renter's, and auto insurance are other policies that you will need to consider for yourself and any employees you may bring on.

What to Include on Your Website

There are several legal elements you should include on your website to keep yourself protected. These are often things that visitors do not click on immediately and exist solely for legal reasons. You should have a Terms of Service and Privacy Policy on the bottom of your website. Each of these pages will need to have certain elements discussed. For the privacy policy, you should include things like:

● Receiving and withdrawing consent

● Collecting information

● Storing payment information

● Third-party services

● Disclosure practices

● Changes to the privacy policy

On The Terms of Service page, you should include the following:

● Billing and membership information as needed

● Eligibility

● Disclaimers

● Agreements

● Privacy policy

● Changes to the privacy policy and other agreements

You should include any important elements that will protect you during a legal dispute of any kind. Do not skip on creating these pages as you can have many legal issues if you do.

Marketing Your Freelance Business

Your business cannot grow without clients, and to get more clients, you will need to do some marketing and advertising to draw them to you. This is done by determining your target market. When it comes to marketing, you will at minimum need to build a great website and social media presence. You should encourage referrals and survey your customers. Online reviews are a great way to convince customers to pick your business over others.

When advertising, try not to focus on price, as this can change with the needs of the company. Instead, focus on other qualities that your business offers. Make sure that any claim you make can be substantiated by the product or service you offer.

Becoming a freelance or sole practitioner is a great adventure to go on, but you must be sure that all the legal issues are managed appropriately. You never want to be caught in a legal battle if you can avoid it.

Noah Rue Noah Rue is a journalist and a digital nomad fascinated with the intersection between global health and modern technology.