Side Hustles and Entrepreneurism Have Risks: Are You Covered?
After businesses shuttered and U.S. workers were sent home at the height of the pandemic in 2020, a report from Dollar Sprout revealed that more that 27% of those with a side hustle rely on that income to pay their bills.
A side hustle might be anything from tutoring, freelance writing, offering professional consulting services, walking dogs or delivering groceries, to name a few.
While the pandemic reshaped the workplace, the prevalence of home-based businesses had already given rise to ETSY, the fourth largest U.S. ecommerce site by monthly visits, where people sell everything from crafts and antiques to handmade toys and items for weddings, among other things.
So what is important to know in this new age of the side hustle?
New models of work create different insurance requirements.
As individuals take on side hustles to generate more income or out of a desire to operate their own businesses, they also take on risks. If you have a side hustle, you need to insure yourself accordingly.
1. Liability insurance tops the list.
Our NH business insurance agency can help you evaluate your side business, assess your existing coverages, and determine if you need a professional or business liability policy in addition to personal insurance.
Why is this so important? Even the most benign gig could destroy an individual financially in the absence of appropriate insurance coverage. Imagine a child takes a nasty tumble in your home while there for a piano lesson or a client accuses you of plagiarism: You will be liable. Or consider the costs you would be responsible for if the dog you’re walking breaks loose and attacks a pedestrian. The right policy can protect you.
2. Cyber insurance is also a growing consideration.
If you set up an online store to sell crafts or homemade baked goods and a hacker steals your customers’ credit card data, what would be the cost to you? Would you be able to recoup your losses? Cyber insurance can protect you in the event of a breech whether your computer is hacked or your phone containing private information is stolen.
Some automotive policies are for personal use only. Others may cover a business-related accident, but with limited coverage.
If your side hustle involves driving and you get into an accident, do you know whether your insurance will cover you? If not, check with us about potential commercial auto insurance needs before an accident occurs.
Even if you are employed as a delivery driver, you need to know whether the company’s insurance covers you and what the limits are for collision, liability and medical. Talk with your independent agent, so you’ll know if you need a commercial policy for adequate protection.
4. Fire insurance.
You probably have a homeowners or renters policy that provides coverage for losses incurred in a fire.
But what happens if you operate a home business and spent thousands of dollars on office equipment? Will the insurance extend beyond your personal belongings to cover that equipment? Or, for that matter, will it cover the materials you purchased to make the items that you sell, or the business inventory you store at home?
Find answers before you need to make a claim, and avoid potentially devastating surprises. The experience agents at Davis & Towle can explain where your personal coverage ends, and where the gaps are in your business coverage.
As your business grows, be sure to inform your insurance agent so they can work with you to adjust your coverages and ensure the policies keep pace with your needs — especially if you hire workers or engage a contractor. Your agent can advise you about workers’ compensation insurance and employment practices liability insurance. Your agent also can review your contractor’s proof of insurance to determine if it meets your business’s needs.
Think of your Trusted Choice agent as a business partner who has your interests at heart. Your agent will work with you every step of the way as you grow your side hustle and reap the fruits of your efforts.