Whether freelancers should purchase business insurance depends on their level of risk. For those in the business of dispensing advice, such as lawyers, brokers, and doctors, liability insurance is mandatory given the subjective nature of consulting and the copious number of clients who are willing to sue. Business that involve clients coming to your home or your office also creates an opportunity for risk, as any accident that occurs while they are on your premises can constitute negligence.
Freelancers who depend on equipment may also find themselves unable to work should their computer or fax machine become inoperable. Again, depending on the amount these items cost, it may be better to just set up your own personal insurance fund. On the other hand, the risk of such equipment being damaged is so low the premiums may be miniscule enough to justify going through an insurance provider instead.
Ultimately, it is best for every freelance worker to account for how much interaction they have with clients, how reliable their equipment is, and the amount of risk involved should the worst occur. Only then can you make an informed decision regarding whether business insurance is right for you.