In the age of the side gig, as many as 44 Million Americans are earning extra income from a source that they do not define as their full-time job. From selling homemade goods on Etsy, to contracting out your professional services on the weekends, or being the direct representative for health and beauty products for your friends, the opportunity to earn has never been easier.
What many people with a side gig fail to realize is that by offering even a small amount of products or services for sale, they can face major liabilities. What would you do if someone stole your product inventory while you were at an event? How would you pay the hospital bills of a client that slipped and fell at your house? Your Homeowners or Renters Insurance would not pay for a business-related claim, so you would likely be held personally responsible.
Luckily, there’s a new insurance product that provides the protection home based businesses need, but that is easier to obtain, and usually much less expensive, than a traditional business insurance policy. Read on to learn how a Home Based Business policy can help keep your burgeoning business remain an asset instead of a liability.
What Types of Home Based Businesses Need Coverage?
Two of the most common types of home based business are those who sell things and those who offer a service to customers. Typically, this is not a full-time venture but rather a side gig for individuals to supplement their income. A common mistake people make, however, is classifying this additional income as a hobby rather than a business. Regardless of the amount of income, these jobs still qualify as a business, and expose the owners to the liabilities of such.
Below are a few common, but certainly not all, examples of home based businesses:
Whether you’re a photographer, selling homemade jewelry, or freelancing out of your home, if any of the following apply to your business, you may want to consider this coverage:
- Customers and/or clients visit your home
- You keep inventory and/or supplies in your home or at job sites (for example, at a venue for an event)
- Damage to your home would result in loss of income
- Employees work in or outside of your home
- Client and/or employee records are kept on your home computer
- You could be held liable/sued for delivering a faulty product or service
Why Do You Need Coverage?
If you’re earning any money in a side gig capacity, chances are that you need insurance coverage, and that you do not currently have enough. In fact, 2 out of every 3 home based businesses do not have adequate insurance coverage. This is primarily because many people assume that their homeowners or renters insurance would cover liability expenses should an accident ever occur, but this is not the case. Other home based business owners simply don’t consider the possibility of financial loss coming from a side-gig started with the intention of earning extra income.
Here are a few examples of loss to consider:
A crafter had a patron slip and fall in their booth at a regional craft show. The person tripped over the display and fell into a neighboring booth, resulting in $10,000 in injuries and $3,500 of damaged product.
The host of a pop-up party was held liable after a friend, who was drinking wine at the party, left and got into a car accident.
A wedding photographer was sued for $15,000 after faulty equipment failed to produce quality photographs.
How Can I Protect Myself?
USLI recently launched a new Home Based Business Insurance Policy, created specifically to fit the coverage needs for this unique liability exposure. On average, Home Based Business Policies cost approximately $300 in annual premium. Coverage typically includes but is not limited to: coverage for the property you sell while it’s stored in your home up to $100,000, coverage for the property you sell while outside your home up to $15,000 (for example, selling at a craft fair), liability coverage up to $1,000,000, and coverage for loss of income.
To get coverage, or just a quote, please visit the online quoting portal on our website at https://www.easterninsurance.com/insurance-quotes/personal-insurance/home-based-business-insurance
For more information on Home Based Business Insurance, or to discuss any of your other insurance needs, contact a member of our customer service team at Eastern Insurance. They can be reached by phone at 1-800-333-7234, or by email at [email protected].