Isn’t it great to be a worker in the 21st century? Just imagine how locked-in you would have felt even three decades ago. You would have probably toiled in a factory or office all day, working for the same company from the time you finished high school or college until you got that gold watch at your retirement party at age 65. The idea of changing careers midstream would have been, if not unheard of, at least outside the box. In short, the map of your life would have been pretty much drawn before you married or had your first child. If you were a woman, your career options were even more constricted.
Today, the sky seems to be the limit. Sure, there are a few of these very predictable job opportunities out there, but they are becoming increasingly rare. Instead, careers are much more fluid and employment paths are likely to meander off onto unpredictable courses on several occasions during your lifetime.
Even so, there are some truths that remain constant, including this one: If you own your own business, you need to take out insurance. It doesn’t matter how unconventional it may be. Regardless of what you sell or how you sell it, you need protection from any number of unpleasant situations. Here are just a few examples of the up-and-coming business types that still require protection from an insurer.
Insurance for Your Home Office
Isn’t it great to be able to set up your own business in your home office? It’s situated right where you live, enabling you to juggle tasks without compromising the quality of your work. What’s more, that nasty commute is a thing of the past. Finally, office intrigue and politics have totally gone by the wayside, unless you count what you have to go through to make your kids eat their breakfast in time to catch the school bus. Things can seem pretty idyllic in your little home office, but don’t allow yourself to become complacent. You still need insurance. “Yes,” you might be saying, “but I already have it. Aren’t I covered under my homeowners policy?” Unfortunately, the answer is often “no.” Most policies only offer a very low amount of coverage on the property that is used for business purposes on the insured premises. Many only give you $2,500 for business property on the premises and $500 for property away from the business premises. This isn’t much at all when you think of how much your business property costs, including your PC or laptop, printer, fax, scanner, modem, router, phone system, desk and chair, office supplies, software and your smartphone. What’s more, your homeowner’s coverage probably doesn’t protect your garage, shed or barn if you’re doing business out of these.
You are also not protected against intellectual property violations, errors and omissions, employers’ liability or workers’ compensation. If you are an attorney or an accountant, you will probably also need specialized insurance to cover your specific business. In addition, all home-based businesses need to have insurance against accidents or injuries that occur at your workplace. What would happen, for instance, if a deliveryman slipped on ice on your front steps while bringing you a work-related package? Make sure your home business insurance policy covers this. If it doesn’t, you’ll need to purchase an additional rider.
The same is also true when it comes to protecting yourself against fire or storm damage. If your homeowner’s policy doesn’t cover this – and it probably won’t – you need to look into a commercial policy that will provide you with business interruption coverage.
As a contractor, you may already know that your business is not subject to employment laws like workers’ compensation. That being said, you shouldn’t fall under the misconception that you don’t need insurance as a result. You definitely need contractor liability insurance, which covers you and the people who work for you against liability related to accidents that happen on the job site as well as products sold by contractors and other types of liability. Without insurance, one of your workers could sue you for lost income, negligence and medical expenses if she sustained an injury while doing a job for you.
Another compelling reason to obtain contractor liability insurance is that it is usually required if you want to compete for a job. Even if it isn’t, you can be sure that the business or individual seeking to hire you will be more likely to take you on if they know you are protected by insurance coverage.
Uber or Lyft
You have decided to jump on the hired car bandwagon by becoming a driver for one of these popular services. You love the ability to set your own hours and to drive when and where you want, but you might be confused about what insurance you need to purchase. It can be complicated. While driving for them, you are covered by Uber’s or Lyft’s insurance. When their app is turned off, your personal coverage kicks in. The gray area happens when you’re between clients, with the app on and no passengers in your vehicle.
Fortunately, some insurers have recognized the gap and are beginning to provide coverage for rideshare drivers. Here are some options:
- Metromile: Available in Illinois, California and Washington for Uber drivers, this is per-mile coverage. Metromile gives you a dongle that you plug into your car. It tracks your mileage, and a partnership with Uber enables you to subtract your personal from your business miles and only charges you for your non-Uber driving.
- Geico: Available for all rideshare drivers in Virginia, Maryland, Texas and Georgia, this is cheaper than the rest of Geico’s commercial offerings. Go to their website and check it out.
- USAA: For all rideshare drivers who have served in the military, their spouses and children in Colorado and Texas. If you already have auto insurance with USAA, you just pay $6 or $8 more per month to extend your policy.
The good news for rideshare drivers who work for Lyft, Uber and the other players in the field is that insurance options are sure to expand in scope in the upcoming months and years. If you don’t live in one of the states that currently have insurance options, keep your eyes open for new offerings.
Being an entrepreneur can be an exciting yet overwhelming undertaking. No matter how thorough your business plan may be and how much capital you have accumulated to keep your enterprise going, there are some unforeseen bumps in the road that can blindside you. Insurance coverage is the most effective way to protect yourself from what can often be a devastating catastrophe. In the end, purchasing it may just turn out to be one of the best business decisions you ever make.