Millions of Americans around the country have turned a hobby, talent, or professional skill into a way to make extra money outside of their full-time career. Whether you want to explore new hobbies or save up for your dream home, successfully pursuing a side hustle requires adequate planning, scheduling, and goal setting. In your planning process, you should also include the “what if’s” and active steps toward resolving issues within your operation.
Most people don’t realize how much hard work and risk come with owning a side business. Without proper coverage, property loss, lawsuits, and other interruptions could put your finances at bay. While it may seem like an extra expense, insurance could save your business from extreme loss. But how do you know if your side hustle needs insurance?
Keep reading to dive deeper into what defines a side hustle, the signs you should insure your small business, and which commercial insurance policies you should consider.
What Defines a Side Hustle?
We’ve all heard the term “side hustle,” what does it mean, and what defines a side gig? While some may get a part-time job for additional income, side hustles are typically self-managed. With side hustles, you have more freedom and flexibility over your hours of operation and what you want to do during that time. A side hustle can involve your passions or talents or be an extension of your professional career. There are many side gig opportunities, from tutoring to becoming a social media influencer.
Signs You Should Insure Your Side Gig
No matter the type of business you’re in, there will be some risk. However, how do you know if you need insurance for your business? Perhaps you work from home as a freelance writer. What are your next steps in case something happens to your equipment? It would be best to consider protecting your assets and investments from unforeseen incidents.
Below are a few signs to help you decide if you should insure your side business:
- If you use your car or a company vehicle to work
- If packages come directly to your business or personal property
- If you work with animals or children
- If your side hustle is your primary source of income
- Could someone get sick or hurt using your services or goods?
- Can you afford legal or lawsuit fees?
- Do you handle sensitive information? (card, banking, payment information, etc.)
Types of Commercial Insurance for Side Gigs
You can create a small business out of anything, from blogging to freelance graphic designing to dog walking. You should protect your hard work with professional insurance, but what type should you get? Each business requires various levels of protection and insurance coverage. Here are four common types of commercial insurance policies to help you find the best one.
General Liability Insurance
The most common type of business insurance is general liability insurance. This will cover the basic needs and protections that a small business may require. This covers bodily injury on your property and damaged equipment. Even if you work from home, you should consider adding this coverage to your policy. This way, if your homeowner’s insurance doesn’t cover the damage, theft, or injury, you have your business liability insurance to count on.
Business Owner’s Policy (BOP)
While a business owner’s policy (BOP) isn’t a form of insurance coverage itself, it can protect your business’s specific needs. These policies typically include property, vehicles, business interruption, general liability, and crime or cyber-attack insurance. You can customize your BOP based on your business protection requirements. This way, you can save money by bundling your coverages instead of paying for each individually.
If your side hustle grew from one person to two or three, you need workers’ compensation. This will protect your company from legal issues if someone suffers from an injury while on the clock. Workers’ comp covers a wide range of medical injuries and provides employees with benefits while they’re out of work due to their injury. This will resolve many potential problems and save you from lawsuits.
Commercial Auto Insurance
Every driver on the road must have insurance in California, and that means you need to insure your commercial vehicle. However, you can insure your business vehicle through your insurance instead of keeping it on your policy. Commercial auto insurance protects any business-owned vehicle(s) for handling company matters and covers liability. It also applies to employees who drive your company vehicle or use their car to conduct deliveries or other services.
However, if an employee used their own car business responsibilities that didn’t involve delivering something, they would need to contact their insurance company, not use the company’s insurance. As a business owner, it would be best to consider adding non-owned auto liability insurance to your BOP. This way, if your employee doesn’t have auto insurance, it wouldn’t fall on you.
Why You Should Consider Covering Your Side Hustle
Kudos to you for taking your hobby, talent, or professional career to the next level and pursuing a side gig to earn extra cash. You should protect your hard work from the unexpected. If you still need convincing, here are three additional reasons to consider insuring your side hustle.
Be Prepared for the Unexpected
Life happens, and mistakes do, too! Whether it’s simple accidents, natural disasters, vandalism, or theft, unexpected accidents can take a turn for the worse. However, with commercial insurance, you can face the situation confidently because you’re financially prepared when life throws a curveball.
Offers Peace of Mind
Along with being prepared for the unexpected, insurance offers you peace of mind. Knowing that you can handle any scenario that comes your way is a plus! As a business owner, you have a million responsibilities to juggle at one time. Save yourself time, stress, and money by insuring your side hustle.
Your Current Coverage Won’t Protect Your Gig
A common misconception that many people think is that their homeowner’s or renter’s policy will protect their business if they work from home. However, that’s not always the case. Check your current homeowner’s policy and see what’s covered. If your insurance doesn’t cover your day-to-day business equipment, you should consider adding a commercial policy for your side gig.
It’s better to be safe than sorry. We’re a home and auto insurance company in California, but we also offer commercial and business insurance for those with side hustles! Protect your hard-earned work and build your small business into a powerhouse by planning and preparing yourself for the unforeseen. For more information, be sure to contact one of our agents today.