There are plenty of ways to make extra money these days. Some people use the internet, such as selling items on eBay, Amazon, or Etsy. Others use their cars, delivering pizzas or transporting people through services such as Lyft or Uber. Then there are those who just start up a business in their home, powered by their own ideas, savings, and credit cards.
While you might not think about it, if you participate in any of these activities, there’s a good possibility you’re doing so without the protection of insurance. Contrary to what some might assume, most standard home insurance, renters insurance, and auto insurance policies won’t cover “business pursuits.” Though you’re making extra cash now, it may all disappear, along with everything else you own, should an accident occur while engaged in a business activity.
Think about how easy a work-related accident could happen:
- You could hit a deer while delivering a pizza.
- You could have a bad car accident while you were hiring yourself out as a taxi.
- A customer could slip on the ice while stopping by your home office, which results in him or her throwing out their back and rendering them unable to work for months.
- You’re selling produce at the farmers market that causes widespread food poisoning.
- A product or service you provided caused injuries, physical or otherwise
As you could imagine, this list could easily go on-and-on. While some of these examples will cost only a few thousand dollars of damage, which you could recover from over time. Others could result in losses that would be devastating. Odds are, if you have a second job, it would be impossible for you to pay for the damages, medical bills, and legal fees. The lesson here is: It would be well worth your while to find out from your local insurance agent if you need small business insurance.
Different Types of Insurance for Business
Insurance for individuals isn’t “one size fits all” and neither is the case for small business insurance. There’s more than one type of policy, each with different types of coverage and different levels of protection. What kind of insurance would work best for your small business will depend on things like whether customers visit onsite, the value of your equipment or inventory, if you have employees, and more. Some of the most common types of insurance for small businesses include:
Business Owner’s Policy (BOP)
A BOP offers the most protection for a small business. It provides liability and property damage, including hazards like fire, theft, general business liability and more. It can cover expenses associated with injuries or damages received while on your property, as well as incidents that occur offsite, including damages caused by your products or services rendered.
Home Office Policies
Some companies are now offering a bit less protection than a stand alone BOP with what is called a Home Office policy. It could be suitable for some small businesses with more limited needs. They combine a homeowners’ insurance policy with a business insurance policy. They can offer financial protection for general business liability, theft, lost income due to damage to the home, and more.
Business Pursuits Endorsements
An endorsement offers the least amount of protection for a home based business, but may be all one needs depending on the business they are pursuing. Adding a Business Pursuits Endorsement to your homeowners’ insurance policy essentially removes the “business pursuits” exclusion we mentioned earlier in this article. However, if you welcome customers to your property, have a lot of valuable inventory on site, or if you have expensive equipment, this most likely isn’t the best choice.
As you can see, these options offer variable levels of protection, each designed for a particular need. However, there are some situations where additional policies may still need to be purchased. For example:
- If you have employees, you may need workers compensation insurance as well as coverage for payroll and other expenses, and possibly an Employment Practices Liability Policy (EPLI).
- If you have dedicated vehicles for your business, commercial auto insurance may be needed.
- If you are providing professional services, errors and omissions (E&O) insurance might be a good option as well.
Get Covered with Small Business Insurance
Your side job or home based business should be a blessing, not a curse. Small business insurance is a prudent choice for any small business owner to help to keep their business, and personal finances financially secure. Call Thiel Insurance Group today. We’ll be happy to help figure out what is right for you.
