You finally did it. You left the nine to five, made the leap, and now work for yourself. There’s a lot to worry about once you become self-employed, including what you’ll do when things go wrong.
Make sure you protect yourself and your new business with the right self-employed business insurance coverage. Every business is unique, but there are a few forms of coverage that every business needs to consider. Start with these types of insurance.
General Liability
The most common of all business insurance coverages, it’s also the most important. A person interacting with your business – a vendor making deliveries, a client you meet at a coffee shop, a shopper in your booth at the craft fair – can easily hurt themselves or sustain property damage in the course of working with you. When that happens, you’re liable for the damages. General liability is what pays for those damages and it helps you if you’re sued because of the damage done.
Commercial Auto Insurance
Yes, even self-employed people who work from home and “never go anywhere” need to consider commercial auto insurance. Why? Because all business owners need to drive for business at some point. More importantly, your personal auto insurance won’t cover you if an accident occurs while you’re driving for business purposes. Trips to buy supplies, drop off an order, and meet with a client all count as “business purposes.”
Errors & Omissions or Professional Liability
For self-employed individuals who provide a service or who use their expertise to provide goods, you need professional liability (aka errors and omissions) coverage. This protects you when an unhappy customer or client accuses you of causing harm because of a professional mistake. Maybe they think your advice wasn’t very good. Maybe you made a mistake in your service and it cost them money or reputation. Professional liability pays the damages and covers you if you’re sued.
Commercial Property Insurance
Working from home? Your homeowners insurance likely won’t cover your business property. If it does, it will only provide a certain amount, anywhere from $1000 to $5000. This may not be enough to replace equipment, inventory, materials, supplies, or anything else you need to operate your business. Some policies may not cover business property at all. If your business property is damaged or destroyed, you need to get back to work as soon as possible – commercial property insurance will help you do that.
Health Insurance
Yes, you need health insurance when you’re self-employed. Not only do you not want to face massive medical bills, you’re also now fully responsible for a business. Taking care of your health, especially with preventative care, allows you to continue to work. Neglecting your health because of a lack of insurance could lead to more serious injury or illness which stops you from working and building your business.
Life Insurance
A lot of people don’t think about life insurance, in part because their employer may offer coverage as a benefit. Once you work for yourself, you have to provide your own benefits, and life insurance is an important one. No matter your family structure, married or single, with or without kids, your life insurance policy will help those you leave behind. It reduces the financial strain many families feel and is one your final chance to take care of those you love.
Workers’ Compensation
If you’re new to the self-employed life, you likely can’t imagine hiring employees. But it’s not unheard of for solopreneurs to grow to the point of needing help. When you hire someone as an employee, you will be required to purchase workers’ comp coverage. This pays for their medical bills and lost wages if they get hurt or sick in the course of working for you. It also protects you in case they decide to sue.
Coverage Specific to Your Business
Every business is unique, and there will be some insurance coverages that apply to one business and not another. It’s important to work with an independent insurance agency who understands this and can offer unique coverages that help you protect your business. You don’t need a cookie-cutter policy because you’re not a cookie-cutter business.
Contact Charlotte Insurance today to discuss your self-employed business insurance needs!