Useful information on the best insurance for sole proprietors
Kudos to you for becoming a sole proprietor, the first step toward setting your business plans in motion. Deciding to be your own boss comes with great responsibility. One of the most important tasks you need to check off your list is safeguarding your business against the unexpected. Not sure what type of insurance you might need as a sole proprietor? You’ve come to the right place!
Choosing business insurance can sound daunting, but trust us, it’s fairly easy. First thing to do is consider what your business does, what services you provide, and how and where you provide them? Once you’ve outlined the basics, take a look below to get an idea of what types of policies best fit your needs as a sole proprietor. In addition, you can find some great information on specific professions and what insurance is needed and recommended here.
Location, location, location
Where you operate your business from can define the type of insurance policy you may need. If you are operating your business out of your home, a location you don’t own, or at the location of your client, General Liability insurance is necessary. This is the basic insurance coverage every business needs.
General Liability (GL) covers third-party claims of property damage, bodily injury, and more. This type of coverage comes to the rescue if someone were to accuse you of damaging their property or causing injury to them by covering possible costs to repair or replace the damaged goods or pay medical costs – including lost wages.
As a sole proprietor, you may choose to buy a commercial building to conduct your business from, if this is the case, you’d benefit from a Business Owner’s Policy (BOP). This policy will cover your business premises and property in addition to providing the third-party coverage of General Liability.
What about my business equipment?
As you run your business, chances are you have a few pieces of business equipment you use to perform your day-to-day tasks. Think computers, tools, machines, office furnishings, things of that nature. To protect these assets, consider a Business Owner’s Policy (BOP) even if you don’t own your business premises. This includes General Liability coverage, plus first-party coverage for your own business property.
Imagine the headache avoided if your computer is damaged or your camera or tools are stolen. The peace of mind Business Owner’s Policy gives you is invaluable.
And keep in mind, if you have a BOP, general liability coverage is included, so you won’t need a separate GL policy for your small business.
Does your business provide a service or give advice?
You’re a sole proprietor, so does your line of business have you giving out advice to others or performing services? If so, you’ll need Professional Liability insurance. This type of insurance is sometimes called errors and omissions or E&O coverage.
This particular coverage protects you from claims that something you did was done incorrectly (an error), or that you were supposed to do something that you neglected to do (an omission). You can never be too careful since people will sue you for just about anything – even if you haven’t done anything wrong or the client didn’t follow your advice. A lawsuit – no matter how baseless it may be, can be expensive to defend. Professional Liability coverage will pay your defense costs, as well as a settlement or judgment, on a covered claim.
What type of information are you handling?
If you have a website for your small business or store sensitive information (think credit cards, social security numbers, any type of health information) it’s advisable for you to have cyber insurance. Cyber insurance covers the costs associated with a hack or data breach, including ransomware demands.
Were you aware that a cyber policy with Hiscox includes a suite of training tools to help you prevent a cyber incident in the first place, as well as crisis management services from breach response experts? You can learn more here.
You may think that being self-employed, there isn’t a need for business insurance. Think about it: you have health insurance, you protect your vehicles with auto insurance, and there’s insurance for pets, homes, etc. So, why would you choose not to protect your small business? Depending on different situations you may need to provide a certificate for insurance to conduct business. In some areas, a basic insurance policy is necessary.
As a sole proprietor, the decisions may be all up to you, but when it comes to insurance, the only decision you need to make is whom you trust to protect your business. When you partner with Hiscox you can rest easy knowing your business is protected by the business insurance experts. Get a free quote now!