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Self-Employed Business Insurance Policy Information

Self-Employed Business Insurance

Self-Employed Business Insurance. More and more people are turning to self-employment to meet their career goals, but being self-employed does not protect them from the potential risks they face in their jobs - risks that can open the door to liability and financial ruin. It also does not afford for the employee the same types of insurance coverages otherwise enjoyed in the traditional workplace.

Self-employment offers both freedom and flexibility, and self-employed insurance can ensure that you are protected from general liability and specific perils that are common in your line of work. Self employed businesses should consider liability self-employed insurance coverage.

This type of coverage protects your assets from being seized in the event a major lawsuit against you results in a big award.

Self-employed business insurance protects you from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked self-employed business insurance questions:

What Is Self-Employed Business Insurance?

Self-employed business insurance is a type of insurance coverage designed for self-employed individuals who run their own businesses. It provides financial protection for the business owner in the event of losses or accidents related to their business operations.

Some common types of self-employed business insurance include liability insurance, property insurance, professional indemnity insurance, and product liability insurance. These policies can help protect self-employed individuals from financial losses and legal liabilities, ensuring the longevity and stability of their businesses.

How Much Does Self-Employed Business Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small self-employed businesses ranges from $27 to $49 per month based on industry, location, size, payroll, sales and experience.

Why Do Self-Employed Business Owners Need Insurance?

Small Business Woman On Phone

For most small business owners, the business is their primary livelihood - their bread and butter, whether they are just starting, or planning on opening up more locations.

Self-employment insurance is a type of insurance plan that meets the coverage requirements of your particular business structure. The reason that it is important is that it protects your business from claims of liability from customers, clients, and others.

Many self-employed people do not feel a need to be out the cost of insurance coverage for themselves and their businesses. The need for insurance for the self-employed is usually profession-specific, but all businesses should consider some type of coverage.

Without this type of insurance, the business and the personal finances of the self-employed are at risk in a litigious society.

Claims of liability range from damage you cause to someone's property while you are on the job to claims against you from someone who becomes injured on your property.

Providing substandard work may leave you in breach of a legal contract, opening you up to claims, or your business may be burglarized, causing you a loss of assets. All of these situations are reasons for businesses to buy effective policies that guard against known and potential perils.

What Type Of Insurance Do Self-Employed Business Owners Need?

As a self-employed business owner, there are several types of insurance you may need to consider:

  • Liability insurance: This protects you from financial loss in case a client or customer claims you are responsible for injury or property damage.
  • Health insurance: Self-employed individuals can purchase individual health insurance policies.
  • Disability insurance: This insurance covers lost income if you become disabled and unable to work.
  • Property insurance: If you own a business location, you need to have property insurance to protect your building and contents.
  • Workers comp insurance: If you have employees, you may be required by law to provide workers' compensation insurance.
  • Life insurance: This insurance can provide financial support to your family in case of your death.
  • Business interruption insurance: This insurance covers losses due to unexpected events like natural disasters that prevent you from conducting business.
  • Commercial Automobile insurance: If you use a vehicle for business purposes, you need to have commercial auto insurance.

It's important to evaluate your specific business needs and consult with an insurance professional to determine the coverage that's right for you.

Self-Employed Business Information

Around 15.3 million Americans reported being self-employed in 2009, and that number is only poised to rise. This amounts to around one out of nine U.S. workers on the self-employed tally. Construction, service industries, and agriculture are top fields for the self-employed.

While taking the reins of self-employment can be quite liberating, the fact is that you also sacrifice some of the benefits that you might otherwise enjoy if you worked in the traditional job market.

Self-employed people are responsible for obtaining their own health insurance. Under the Affordable Care Act, or ACA, all Americans must purchase health insurance policies and maintain them - or face a stiff tax penalty if they do not.

This includes the self-employed. Unless you are in receipt of health insurance coverage from a spouse or a parent, then you must find your own health insurance in order to comply with the law and also to ensure that you have coverage if you fall ill or become injured.

In addition, self-employed people in should seek out other types of insurance that is normally obtained through an employer, such as disability insurance. This is a very important type of insurance for all workers, although many do not realize it until it is too late and they are in need of it.

A debilitating illness or a major accident can leave you unable to perform the duties of your job. Protecting yourself with disability self-employment insurance can help you maintain some income if you find yourself in a position that you are not able to make money.

Self-Employment Insurance Information

You can opt to go for a limited liability corporation filing, or LLC, for some protection. Although there are some tax consequences for structuring your self-employment as an LLC, it can also prevent you from needing to file bankruptcy should your business end up on the receiving end of a liability claim.

A commercial self-employment insurance policy can provide liability coverage to protect your business from liability, whether you are structured as an LLC or not.

You should also consider life insurance, especially if you have family that depends on your income. Many self-employed individuals buy their own life insurance policies to ensure that should something happen to them, their loved ones have a stream of income and enough money to cover final expenses.

In addition, a retirement plan for self-employed persons is important. In the working world, you would likely have access to a 401(k) plan from your employer. If you're self-employed, you can create your own plan that's customized to your goals, whether that's an individual retirement account or other type of investment structure.

What Does Self-Employed Business Insurance Cover & Pay For?

Self-Employed Business Insurance Claim Form

Self-employed businesses, like any business, face a number of potential legal risks. Here are a few reasons why such businesses might be sued, along with examples of how the right insurance coverage could help mitigate those risks:

1. Professional Negligence: A self-employed business may be sued for professional negligence if a client or customer alleges that the business failed to provide a service to the standard expected, which resulted in damage or loss. For example, if a self-employed architect designs a building that later collapses due to design flaws, they may face a negligence lawsuit.

Insurance Solution: Professional liability insurance, also known as errors and omissions (E&O) insurance, can help in such situations. This insurance helps cover the costs of legal defense and any damages awarded, up to the policy limit. It can also cover settlements, which can often be less costly than going to court.

2. Breach of Contract: A self-employed business could be sued if it fails to deliver the services or goods as agreed upon in a contract, leading to financial loss for the client.

Insurance Solution: In certain cases, general liability insurance can cover legal expenses related to contract disputes. However, the best prevention method for contract lawsuits is to have solid contracts and to meet all contractual obligations. In complex agreements, it's often worth investing in legal advice.

3. Personal Injury: If a client, customer, or third party is injured on the premises of a self-employed business, the business could be sued for medical costs, lost wages, and other damages related to the injury.

Insurance Solution: General liability insurance can help here as well. This type of insurance typically covers bodily injury claims, paying for medical expenses, legal fees, and any damages awarded in a lawsuit.

4. Product Liability: If a self-employed business produces a product that causes harm or injury, the business could be sued for damages. For example, if a self-employed soap maker sells a product that causes an allergic reaction, they could face a lawsuit.

Insurance Solution: Product liability insurance can help cover the costs of a lawsuit stemming from damage caused by a business's products. This includes legal defense costs, settlements, and any damages awarded by the court.

5. Intellectual Property Infringement: If a self-employed business is accused of infringing upon someone else's copyright, patent, or trademark, they could be sued for damages.

Insurance Solution: Intellectual property insurance can provide coverage for legal fees and any potential damages or settlements in an infringement lawsuit. It's worth noting that general liability insurance often excludes intellectual property disputes, so a separate policy may be necessary.

Remember, insurance policies vary widely and it's important to understand what is and isn't covered by each policy. Always consult with an insurance professional to ensure your business has the appropriate coverage for its specific risks.

Self-Employed Business Insurance - The Bottom Line

The cost of self-employment insurance is negligible in comparison to the financial fallout just one claims against your business might cause. Finding a policy tailored to your business' potential risks is as easy as discussing your situation in depth with a seasoned insurance agent. As a general rule, the lower your risk of liability, the more affordable the policy.

Additional Resources For Small Business Insurance

Protect your company and employees with the right commercial insurance policies. Read informative articles on small business insurance coverages - and how they can help shield your company from legal liabilities.

Small Business Commercial Insurance

Businesses need commercial insurance to protect their assets, employees, and customers. It helps to cover the costs of potential accidents, lawsuits, and other unforeseen events that can result in financial loss.

For example, if a customer slips and falls on a wet floor in a store, the business could be held liable for their injuries. Commercial insurance can help cover the costs of medical bills and legal fees associated with the incident.

Additionally, businesses often have valuable equipment and inventory that need to be protected from theft or damage. Commercial insurance can provide coverage for these items in the event of a disaster, such as a fire or natural disaster.

Furthermore, businesses often have employees that can be injured on the job. Workers compensation insurance can provide coverage for medical bills and lost wages for injured employees.

Overall, commercial insurance is a necessary tool for businesses to protect their assets, employees, and customers. Without it, businesses could face significant financial loss in the event of an unexpected occurrence.

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