Blog Post 5 min read

How to Properly Insure Your Side Hustle

By Nina Terenzi, Jan. 28, 2021
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This past year, most Americans have faced financial loss in one way or another.  As a result of the ongoing COVID-19 pandemic, many found themselves suddenly laid off, unemployed, or closing the doors to businesses they built from the ground up.  To combat this loss, many have turned to side-hustles to help make ends meet and to stay afloat during these challenging times.  If this scenario sounds familiar to you, be sure you're taking the extra steps needed to protect yourself and your business with an insurance policy.

Without proper coverage, you could find yourself hit with a lawsuit that drains you financially - including your personal assets.  From freelance graphic designing to food delivery services, jewelry making and everything in-between, every small business has unique needs for insurance and Eastern Insurance Group is here to help guide you through the process.

Types of side-hustle insurance policies

Depending on what you're selling or the service you're offering, your needs will vary from the next person.  If you're unsure whether you need insurance for your venture, you can learn more about who needs coverage here.  To get a general idea of the types of coverage available, here are a few common policies you may want to consider.

  • Business Owner's Policy: Did your side-hustle turn into a fully operating business this past year?  Stop right now and read through our guide to a business owner's policy.
  • Professional and Product Liability Insurance: This is an essential piece of coverage that can help protect you from lawsuits against your business resulting from negligence, failure to provide service or mistakes.  Should your business cause bodily injury or property damage to a customer, this will help protect your business and personal finances.  Product liability insurance will also help protect you should you need to recall a product you sold or should it cause harm to customers
  • Property Insurance: Fires, theft and natural disasters can strike at any time and your home insurance policy likely isn't enough to protect your business assets.  It's important to have a policy that either includes your professional property or a separate policy entirely to make sure your side-hustle is protected.
  • Cyber Insurance: Does your side-hustle require a significant amount of time on your phone or computer?  Do you keep customer and client information on those devices?  If you answered "Yes" to either of these, you need cyber insurance.  With attacks on the rise, it's crucial that you're protected to avoid a hefty lawsuit in the event of loss of information.

Insurance specific to food delivery drivers

When businesses shut down last spring, restaurants quickly shifted to offering takeout and delivery to their loyal patrons.  Thankfully, with apps such as GrubHub, UberEats, Postmates and Doordash, we were able to have any meal we wanted delivered right to our doorstep to help support the local restaurants we love so much.  But as the number of businesses who offer these delivery services grow, so do the risks to delivery drivers.  Food delivery has always been a risky business - drivers spend much more time on the road, and therefore open themselves up to more frequent accidents - but with the rise of tech-driven delivery companies, the risk is even greater.

According to a study by the U.S. Bureau of Labor Statistics, delivery driver jobs rank fifth on the list of the top 10 most dangerous occupations.  From minor rear-end accidents to pedestrian incidents, drivers are at risk every time they make a delivery - and most of the companies they work for do not offer insurance coverage.  If you currently work as a delivery driver, there are a few things you may want to consider before taking your next trip.

Does my personal auto insurance policy cover me as a delivery driver?

Because you are operating your vehicle for business purposes, your personal auto insurance does not cover you as a delivery driver.  You will need to either change to commercial auto insurance or consider an add-on to your personal policy.

What happens if I get into an accident while delivering and only have personal auto insurance?

Using your vehicle for business purposes without proper coverage can invalidate your current personal auto insurance.  If you file a claim after your accident, you will most likely be held solely responsible for the cost of any damages.

Am I covered if I'm driving my parents' car?

If you're covered under the same policy as your parents, the same rules apply.  Unless your parents have commercial auto or add-on coverage, you will not be covered.

Will I have to report that the accident happened during personal use?

In the event of an accident that results in filing a police report, you will be required to indicate what you were using your car for at the time of the accident - for example, if you were using it for personal errands or for business-related purposes.  Additionally, if there are other drivers involved in the accident, they may relay this information to your insurer and you will risk them cancelling your policy, and in some cases, lose your license.  

What are my coverage options?

There are a few options to obtain the necessary coverage for delivery drivers:

  • Employer Coverage: If you are working for a large chain or independent restaurant, they may offer coverage called Hired and Non-owned Vehicle Liability Insurance for drivers who use personal vehicles.
  • Commercial Auto Insurance: This option covers you in the event of an accident while operating your vehicle for business purposes.  Coverage protects owners against damage and liability claims.  Easter's Commercial Auto Insurance programs provide solutions to address all the following risks: Comprehensive and Collision, Emergency Roadside Assistance, Liability, Medical Payments, Loss of Earnings, Uninsured Motor Vehicle
  • Delivery Driver Add-On: As the popularity of becoming a delivery driver increases, new options for coverage are developing.  Some insurance companies offer supplemental coverage to a personal policy that will specifically cover a delivery driver, like an umbrella insurance policy.  With this option, you will be able to maintain your current personal policy while being protected when using your car for commercial purposes.

As with any insurance policy, your coverage will depend on your current auto insurance policy, so it's best to speak with your current provider to understand your options.

If you could use assistance understanding your insurance options, contact a member of the Eastern Insurance personal lines customer service team by calling 800-333-7234 (Option 2), or sending an email to customerservice@easterninsurance.com.

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