Do You Need Business Insurance If You’re Self-Employed?

do you need business insurance for self employed - the kind insurance

In recent years, many people across the US have decided to leave their cubicles for a chance at starting their own businesses. It’s a smart move for some people because you control the business, the hours, and the recruitment. You also get the chance to earn money like never before. 

However, like any other business, some situations or events are just out of your control. Accidents can happen and if you’re not ready, it can harm your growth and your clients. That’s why business insurance exists in the first place!

But, do you really need business insurance if you’re self-employed? Yes, you do, and here are some common policies you might want to consider.

Different Types of Self-employed Business Insurance

There is danger in any line of work, whether you’re a freelance writer or a plumber. Some professions are more prone to workplace injuries than others.

Self-employment is nothing without risk and it requires extensive business insurance. Here are some common types of business insurance that you’ll need to keep yourself safe and protected:

General Liability Insurance

Suppose you run a landscaping operation and deal with people’s property on a daily basis. Now, what happens if you damage any piece of property or any person during your work? It may be a car, a building, or just a simple slip and fall. General liability insurance is here to protect you.

You are also protected by this insurance if you are accused of defamation. This type of insurance is available as a standalone policy or as part of a business owner’s insurance.

Professional Liability Insurance

Everyone makes mistakes. Professional liability insurance can help with that. It offers protection in case a client suffers harm (mostly financial) as a result of a service or piece of advice you offer.

Professional Indemnity Insurance

One of the most crucial forms of insurance available to self-employed people is professional indemnity. Although it’s not legally necessary to have this coverage, it’s strongly suggested for anybody working as a freelance consultant or managing a company that provides services to its customers.

In essence, professional indemnity insurance pays the costs of any lawsuits brought against your business or the end product you’ve created. If you made a mistake that cost your customer money, destroyed their infrastructure, or damaged their brand, you can be the subject of a court lawsuit for damages.

Building Insurance

Just like your home and personal assets, a building insurance policy can cover you against damage to your business property or assets. It can include natural disasters, theft, or many other factors that damage your business property.

Business Interruption insurance

Accidents are inevitable and for some reason or another, your building may shut down temporarily. If you don’t have a plan B, you’re simply out of work until the premises are open again. That’ll be a significant blow to your operation. 

Even if you manage to start again, it’ll be hard to survive in the short term because about 40% of businesses can’t continue their operations after a long period of interruption. Therefore, it’s wiser to have business interruption insurance to pay for additional expenses while you’re out of work.

Credit Insurance

In any line of work, your business deals with clients and customers regularly. There will inevitably be times when they won’t make payments on time or at all. For instance, they may have gone bankrupt and are unable to clear their debts. But, in any case, you need the money to continue your operation and without their payments, you will be in a lot of trouble. This is where credit insurance can come to your help. 

Business Vehicle Insurance

Your car must be covered by business vehicle insurance if you drive a company vehicle or even use your personal car for work-related purposes like taking paying passengers or delivering products.

Even if your automobile is currently insured, it’s doubtful that the coverage includes use for both personal and business purposes. Therefore, tell the insurance agency about any business trips you take with that car. By doing this, you’ll be covered in the worst-case scenario.

Key Person Insurance

This covers the business up to an agreed limit for any financial losses that would result from the sudden death or illness of a crucial member of the company. This includes the owner or a manager.

If you’re a one-man show or work with just a few team members, it’s wiser to get key person insurance. If a key member of the business, like the owner or an executive, dies suddenly or becomes ill, a key person policy will protect the business against financial losses. The amount of coverage differs in each situation. 

Cyber Liability Insurance

No matter the business or the industry, you probably have an official website or a business email that may contain sensitive information about your clients. As you know, holding such information is a great responsibility because hackers usually target small self-employed businesses that don’t have a large budget for cyber security and count as easy targets.

Therefore, you need some coverage for the worst-case scenario and cyber liability insurance is the best way to recover from such troubles and survive in the market.

How Much Does Business Insurance Cost for Self-Employed Individuals?

It’s hard to put a specific number on self-employed business insurance policies because we’re not talking about a specific industry. However, you can make an accurate estimation by considering the following factors:

  • The industry
  • The annual payroll
  • The annual income
  • Type and extent of policy

Will Home Insurance Cover My At-Home Business?

Contrary to popular belief, home insurance doesn’t cover everything, and it may not provide compensation for your business materials and equipment if they are lost or damaged due to a disaster. This is because home insurance is designed to cover your physical dwelling and personal belongings. Materials you use for work purposes should be covered under a separate business insurance policy. The most common of these is commercial property insurance.

Commercial property insurance covers the physical assets of your business, including a possible physical location (that is not your home). It compensates you for losses and damages caused by fire, wind, hail, lightning, smoke, explosions, theft, vandalism, and more.

Finding an Affordable Self-Employed Business Insurance Policy

Now that you have a list of different policies to work with, it’s time to see how you can get them at an affordable rate. Here are some points to consider:

  • Weigh your options: Just because you’ve used a certain agency for years, it doesn’t mean that there are no others with better services and cheaper rates. Look for those that offer the best coverage for sensible premiums.
  • Consult with others: Talk to your friends and other business owners in your sector about a policy or an agency. You can also get recommendations from a local chamber of commerce to see if they offer a reliable business insurance agency. 
  • Do some research: Be sure to check online reviews and testimonials before deciding on an agency. Don’t jump to the cheapest rate because the cheapest rates often don’t give you the best quality. You need to get a sensible deal based on the amount of premiums and deductibles.

Best Business Insurance is Harrisburg, PA

The best business insurance agency is one that offers flexible policies with competitive rates to suit your specific needs and goals. You need a team with an extensive track record of protecting people like you. Luckily, that’s exactly what we find for you here at The Kind Insurance. We’re an independent insurance agency. Which means we don’t just push one set of policies on our clients. We scour a large network of reliable providers to find the perfect coverage for your unique business & budget. We’re just a phone call away, ready to answer any questions about our rates and policies.

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