If you have taken a look at any of our content, you will notice that there is often a spectrum of answers to common questions for a side business. This question is no different. There are a few different types of insurance policies that might be relevant for your side hustle, but the first thing is that the purpose of insurance is to protect you from financial loss. Before you insure everything that you can possibly insure, you ought to ask yourself if you would really care if you lost the thing you are trying to insure or protect. For example, you could insure your inventory. But if you have $500 worth of inventory on hand at any given time, it probably just isn’t worth insuring, right? With that general rule in mind, let’s look at some different types of business insurance:
General Liability Insurance is the most common type of business insurance, it aims to protect your business from bodily injury and property damage lawsuits from outside parties (meaning non-employees). If you are a caterer selling food items, you would certainly want general liability insurance to protect you from a lawsuit from a customer that says your food made them sick. If you repair cars on the side, that would be another good use case for general liability insurance. Maybe the most common example of general liability insurance is to protect your business if a customer comes to your physical location and slips and falls.
Professional liability insurance, also known as errors and omissions insurance, can provide protection for your business against claims of negligence, misrepresentation, or mistake. For example, a customer might allege that your products or services caused some sort of financial harm to them. If your side hustle is a consulting business where you are selling your expertise or advice, professional liability insurance is a must!
Property insurance is pretty straightforward. You can simply insure all, or some, of the business property like equipment, vehicles, inventory, or buildings. If the only property that your business has is a 3-year-old laptop, you probably don’t need property insurance, but if you built a garage on your property to do your side business work and it is full of equipment or inventory, then you certainly will want to purchase property insurance above and beyond your homeowner insurance.
Finally, there is worker’s comp insurance which provides funds to pay medical bills and wages for people who are injured or get sick at work. Obviously, if you don’t have any employees yet this is not necessary. So for many side hustlers, this won’t become an issue until the business becomes a full-time gig for you and you hire employees.
There are really 2 approaches to insurance for your side business:
The main takeaway from this video is that you probably need some type and level of insurance for your side hustle which many side hustlers tend to overlook or just don’t think about. Hopefully, this helps give you enough guidance to know what types of questions to ask when you reach out to your insurance agent. Here at Side Hustle University, we serve as a course guide that is focused on encouraging you to create your own side hustle. We are committed to giving you the best opportunity to identify, shape, and build your business from the ground up. We encourage you to check out our website to learn more about how you can become the side hustler you've always wanted to!
Here at Side Hustle University we serve as a course guide that is focused on encouraging you to create your own side hustle. We are committed to giving you the best opportunity to identify, shape, and build your business from the ground up. We encourage you to check out our website to learn more about how you can become the side hustler you've always wanted to!