So you have a side hustle? You spend your 9-5 making living and 5-9 doing things which make you alive, also known as side hustle.
Having a side hustle or business is a great way to make some extra cash and do things which you enjoy. But without proper insurance you may end up with headache and financial liability.
You should realize that your personal car and home insurance policy will not cover business related claims.
Some examples where you may need insurance for your side gig
- You drive uber or lyft using your own car
- You bake or cook and someone may get allergic reaction by consuming your product
- You sell real estate as side gig
- You do taxes during tax season
- You run a salon during evening hours in your home
Professional liability Insurance for side hustle (also known as Errors and Omissions insurance)
Professional liability insurance protects you from claims initiated by clients related to professional negligence, malpractice or misrepresentation.
Professional liability insurance may have different names based on your profession. For example in the medical field this is called medical malpractice insurance. In professions like real estate agents or insurance agents it is called errors and omission insurance.
Professional liability insurance is a specialty coverage that is not provided under homeowners’ endorsements, in-home business policies, or business-owners’ policies. It only covers claims made during the policy period.
What does Professional Liability Insurance covers
If someone is suing you for risks covered in your professional liability policy then your policy will cover legal fees and incidentals like
- Court fees
- Attorney fees
- Cost to settle case
- Fines to be paid
Example of side business which need Errors and Omissions Insurance ( also called Professional Liability Insurance)
- Developers who do freelance work may be sued for issues in code they delivered.
- Consultants maybe sued for advice they provided to client
- Bookkeepers maybe sued for error they make
- Real estate agents need protection against error and omissions
Using your Car for Side hustle?
Insurance for driving Uber or Lyft as your side hustle
If you drive Uber or Lyft to earn additional income by using your personal vehicle then it’s a good idea to purchase Rideshare insurance policy. Rideshare insurance can be added as endorsement to your auto policy or you can buy a separate policy.
Here is how insurance work when you are working with Uber/Lyft or any other ridesharing company as your side business.
Your app is Off :
In this case your personal insurance will cover your car.
App is on and you are waiting for a customer :
In this case your personal car insurance without a rideshare policy will not cover any loss. Coverage from Uber/Lyft is limited to liability protection.
App is on and you are on your way to pick a passenger:
In this case insurance from your ride sharing company will cover you for collision and liability. Remember many rideshare companies have deductible as high as $1000 for collision claims. Which means you have to pay $1000 from your pocket before coverage applies.
App is on and you are driving a passenger:
In this case insurance from your ride sharing company will cover you for collision and liability.
What is Rideshare Insurance
Rideshare insurance is a type of car insurance coverage available to people who drive for a ride-sharing company such as Uber or Lyft. The insurance is designed to fill the gap in coverage provided by your personal car insurance and the commercial insurance offered by the ride-sharing company.
Do I need Rideshare insurance as Uber/Lyft already provide Insurance?
Your personal car insurance will not cover claims for accidents which occur when you are driving Uber or Lyft as your side hustle. They may even cancel your auto insurance if they find out that you are driving a personal vehicle for commercial purposes.
Insurance provided by Uber/Lyft or any other ride sharing company is maximum when you are driving a passenger with an app working. But coverage is limited when you are waiting for a passenger. Hence Rideshare insurance can cover any gap in insurance which your personal auto insurance and rideshare company does not cover or provide limited coverage.
How much does Rideshare Insurance cost?
Generally rideshare insurance should cost you around $10 – $20 per month above your personal car insurance.
Using your Home for Side hustle?
Insurance for side hustle with Airbnb
Renting your home for short duration via Airbnb and other short term renting sites is a great way to make money. Many hosts do this full time and have multiple properties rented at any point of time.
Your home insurance may cover you if you have few rentals during a year but if you are renting your home for business then you definitely need additional protection.
What does Insurance provided by Airbnb cover?
There are two kind of protection offered by Airbnb
- Host Protection
- Host Guarantee
Airbnb Host Protection
The Host Protection Insurance program provides primary liability coverage for up to $1,000,000 per occurrence in the event of a third-party claim of bodily injury or property damage related to an Airbnb stay.
Here are some examples of what the Host Protection Insurance program should cover:
- A guest breaks their wrist after slipping on the rug and brings a claim for the injury against the host.
- A guest is working out on the treadmill in the gym of the apartment building. The treadmill breaks and the guest is injured when they fall off. They bring a claim for the injury against the host and the landlord.
- A guest accidentally drops their suitcase on a third party’s foot in the building lobby. The third party brings a claim for the injury against the host and the landlord of the host’s building.
Some examples of what the Host Protection Insurance program doesn’t cover:
- Intentional acts where liability isn’t the result of an accident.
- Accusations of slander or defamation of character.
- Property issues (ex: mold, bed bugs, asbestos, pollution).
- Auto accidents (ex: vehicle collisions).
Host Guarantee
Airbnb’s Host Guarantee is designed to protect hosts in rare instances of property damage to their own possessions, unit, or home by a guest staying in the space. The Host Guarantee is not insurance and doesn’t replace your homeowner’s or renter’s insurance.
The Airbnb Host Guarantee provides protection for up to $1,000,000 to a host for damages to covered property in the rare event of guest damages above the security deposit or if no security deposit is in place.
The Host Guarantee Program doesn’t cover cash and securities, collectibles, rare artwork, jewelry, pets or personal liability.
Do I need Insurance beyond what Airbnb provides?
Short answer is yes .
How much and what kind of insurance you need will depend based on your home insurance provider and amount of coverage you need.
Some home insurance policies have home sharing endorsements which can provide small coverage like $10,000.
For more information you can connect with one of our agent who can provide you proper information based on your condition.
Running a side hustle from home
If you have a side business which involves people visiting your home then you will need insurance to protect yourself from:
- Liability claims if your customer is injured
- Protect your business property and equipments
- Professional liability or Errors and omissions
Options to get insurance for your side hustle
You can add an endorsement to your homeowner’s policy which can increase limits on business property and equipment. According to the Insurance Information Institute, it can cost as little as $25 to increase limits from $2,500 to $5,000 for example.
Endorsements to your homeowners liability can extend your liability coverage to include occasional business visitors (which would otherwise be excluded).
You can get a business owners policy which can protect you from all business related risks.
Source:
https://www.airbnb.com/help/article/937/what-is-host-protection-insurance
https://www.thebalance.com/freelance-insurance-for-home-based-business-4779714