5 reasons why your side hustle needs business insurance
Kudos to you for having a side gig as a way to earn extra money, and for some, taking your first steps toward pursuing your passion full time as an entrepreneur.
Your side hustle requires grit, commitment, and hard work. It also may very well require insurance for protection against common risks all small businesses and side hustles face. You may not be running a multi-million dollar business (yet!), but the services you provide on the side still require protection from the unexpected.
Here are five reasons to consider business insurance for your side hustle.
1. Your current homeowners or renters insurance won’t cut it
It’s a common assumption, but one that can be costly – many entrepreneurs who operate a side hustle from their home think their homeowners or renters policy will protect them, but it usually doesn’t.
And it largely explains results from a 2019 Hiscox Side Hustle to Small Business™ Study, in which 47% of small business owners whose businesses began as side hustles said they didn’t think insurance was necessary.
Check your home owners insurance policy. It’s likely your day-to-day business activities are not covered under it. Even if you run your business out of your home, your home insurance won’t cover things like business equipment or damage to a client’s property.
Look into the business coverage Hiscox offers – it’s far more likely to cover your side hustle risks.
2. You can be sued for just about anything – even if you do everything right
A client or customer can sue you if they’re not happy with your work. And even if the suit has no merit, it’s costly to defend in terms of both time and money.
For example: As a market researcher, you’ve been hired to increase sales, but your strategy is not successful and sales actually decrease. The client could make a claim for failure to deliver the services promised.
This is a scenario where professional liability insurance could protect you against claims of negligence even if a mistake hasn't been made.
3. Stuff happens. There’s a lot you can’t control
But mistakes do happen, along with accidents and unforeseen natural or man-made disasters.
Hopefully you’ll never have to a face a situation like the following, but you never know when life will throw you a curveball.
- Working as a contractor, a client trips over your toolbox and fractures his leg. You could be liable for the medical costs.
- As a marketing consultant, you’re away when your home office is broken into and a computer and several electronic devices are stolen.
- As a personal trainer, you instruct an older client who feels dizzy, experiences chest pain, and must be rushed to the hospital following an exercise. The client later claims that the trainer caused her heart attack and mental anguish.
These are just a few of the scenarios that small business insurance could protect you from.
4. A lawsuit can set you back … way back
A lot of side hustles are sole proprietorships, which can leave your personal assets exposed in the event of a lawsuit.
Since you own the company, if a client sues you, he or she can take what you own: Your savings, your car, and other valuables. The proper business insurance can protect you and the things you own and keep your dream as an entrepreneur alive.
5. You have enough things to worry about
Between your side hustle and your full-time job, you have a lot to juggle and think about. Business insurance offers peace of mind and the opportunity to take on new businesses risks that will help you grow. The right insurance can protect you from the costs associated with things you don’t have time to worry about and can’t control.
And when it comes to choosing the right insurance, that can be worry-free as well. Hiscox tailors its policies to the type of risks you face with your side hustle.
Find out if business insurance is right for your side hustle
It’s a cliché, but it’s especially true with insurance: It’s better to be safe than sorry. Protect everything you’ve worked so hard to build and look into small business insurance for your side hustle.
To learn more about turning a side hustle into a small business, download the study, subscribe to the podcast, and get behind-the-scenes looks at entrepreneurs who’ve done it.