The Different Business Insurance Self-Employed Require
Many self-employed individuals do not think about business insurance until they apply for a small business loan, bid for contracts, or find their assets are in danger due to claims. So, if you are a self-employed professional, you should not think twice about getting business insurance; it will effectively manage your risks while assisting your business to grow.
Assess Your Risk
Before you look for business insurance, you must assess your risk. Once you do this, you will have a better understanding of the business insurance policies that you need. Remember, the insurance needs of a business depend on the line of work. Choosing the right insurance policy will protect you and your business from liabilities.
Insurance for the Self-Employed
Every business has risks and as a self-employed professional, you should ensure that you have liability insurance in place. The three most popular liability insurance policies for the self-employed are professional, general, and cyber liability insurance. It is crucial that you understand each type, as it will help you determine which type is the right one for your business.
► Professional Liability Insurance: Not every self-employed professional requires professional liability insurance. It is mainly meant for businesses that provide services and consultation by licensed professionals. So, individuals like architects, engineers, lawyers, CPAs, surveyors, doctors, dentists and others in the medical field should have professional liability insurance. This coverage protects you from claims resulting if you were negligent or make an error while executing the service, .
Remember, an unhappy client is more likely to sue a professional if a mistake is made and your client suffers loss either physically or financially on account of your service or recommendation. Rather than incurring an exorbitant out-of-pocket expense that can ruin you financially, it is best to have professional liability insurance that will handle the defense costs and any court awarded judgement or settlement.
► General Liability Insurance: Many things can go wrong with your business and general liability insurance protects it against many of these. You will have legal defense provided if a suit is filed for bodily injury or property damage liability and payment of court awarded damages by your carrier for a covered loss. Besides, for certain professions, the general liablility policy will include coverage for personal injury such as libel or slander and copyright infringement, and advertising injury.
While insurance policies are designed to protect business owners and their business, general liability insurance specifically covers injury or property damages incurred by others resulting from your business operations. Also, many states in the US require businesses, both big and small, to have general liability insurance, sometimes referred to as public liability.
► Cyber Insurance: Many self-employed professionals feel that cyber liability insurance is more suited for big businesses rather than smaller ones. Well, that is not correct. Whether you are a big or small business, cyber insurance can protect your business should your customers’ personal information get stolen or exposed online.
It is prudent to remember that hackers often target smaller businesses as they do not usually have strong cyber protection policies in place. Hence, if you save your customers’ information in a server, you should definitely have cyber insurance. Your business will benefit as it will provide defense and coverage for the claims filed by your customers, but it also includes coverage for reputation management after a hacking incident, cyber extortion, regulatory fines, damage to systems and third-party services for notification and credit monitoring expenses. The policy will also allow you to conduct a forensic investigation without incurring any out-of-pocket expense other than a chosen deductible.
Finding the Right Insurance
These are some of the most essential insurance policies for the self-employed. Whether you are solopreneur or you have employed workers, it is essential you evaluate these policies and then decide which one is right for you. If you are confused, you can always consult a business insurance agent to assist you in selecting the right insurance for your business.