Whether you’re turning a hobby into a side business beginning to freelance under a company name or simply decided the part-time business fits your work/life balance if you run a part-time business you need commercial insurance. Why do you need commercial insurance for a part-time business? There are three reasons:You’re not covered by your home insurance.You’re not covered by your car insurance.You need liability coverage for business operations.
You’re not covered by your home insurance for a part-time business.
If you store any tools equipment or inventory in your home it won’t be covered by your home insurance since it is used for commercial purposes. If these items cause damage to your home you may also not be covered.
A commercial insurance policy will ensure your company’s property is protected.
You’re not covered by your car insurance.
If you drive for work purposes your car insurance won’t cover you. You will need a commercial vehicle insurance policy to ensure any vehicle registered in your company’s name or that is being used for work purposes like driving to see clients.
You need liability coverage for business operations.
Although your home and car insurance include personal liability protection they won’t cover anything business-related. There are a few types of liability insurance – what your business needs will depend on the service you provide or the products you produce. The different types of liability insurance include:
- Commercial general liability insurance: This is the standard liability insurance for businesses. It helps your business cover damages and legal expenses if someone is hurt or has their property damaged. This is considered to be the basic liability protection for any business, regardless of their size or industry.
- Professional liability insurance: Also known as errors and omissions insurance, this coverage is essential if your part-time business provides professional advice or a professional service. Your clients can sue you for financial loss as a result of your advice or service – or your failure to provide it. Even if you’re innocent, you’ll still need to cover the legal expenses. This type of liability insurance helps cover those costs.
- Product liability insurance: If you sell or manufacture products, this coverage will help cover damages and legal expenses if your product causes property damage or injury to someone who buys it.
- Cyber liability insurance: Cyberattacks are growing increasingly frequent and businesses of all sizes are targets. This protection helps you deal with and recover from a cyberattack or data breach.
Talk to a broker to determine what type of liability insurance your business needs.
What are the benefits of business insurance for a part-time business?
Here are the benefits of commercial insurance for part-time companies:
- Your commercial property equipment tools and inventory will be protected
- If you’re sued you may have coverage to reduce the financial impact provide legal aid and more
- You may have aid recovering after a claim
- Your work vehicle will be protected
- Additional financial security and peace of mind
- Meet contract obligations (some require insurance coverage)
Speak with an insurance broker for your coverage options and to get competitive commercial insurance quotes for a part-time business. A broker is the best resource to answer your insurance questions and get the best rates.
I’m still growing my business so how can I keep my insurance costs down?
Thing is if you’re running your business part-time you’ll want to pay particular attention to your profit and loss balance and that means keeping business expenses like insurance premiums down. To keep your rates low consider the following options:
No. 1: Work Closely with Your Insurance Broker
By working with an independent insurance broker you get an expert that can shop the market for the most cost-effective coverage that suits your business needs. Remember the more your broker understands your business and finances the better he or she will be able to find competitively priced products for you.
No. 2: Choose a Higher Deductible
Deductibles represent the amount of money you pay before your insurance policy kicks in and pays the rest (up to your claim limit). The higher the deductible the less you will pay for the policy. At the same time be sure you don’t set the deductible so high that it will be a financial burden for you to pay the deductible if you have a loss.
No. 3: Avoid Losses
Remember insurance rates are lower for customers with better claim histories. The more losses you have the higher your premiums will be. But the best way to keep rates low is to avoid a loss. By taking preventative action—such as installing a security system or developing commercial equipment checks or even bundling your insurance coverage—you can reduce your chance of a loss and even reduce your annual rates.
Insurance is not a windfall. It’s a way to reduce the catastrophic impact certain unexpected risks can have on you your bank account and your business. Even if you’re working at your business part-time by keeping up to date on your coverage needs and by working with an broker you can protect you and your growing business from potentially devastating risks and losses.