business insurance Archives

Do You Need Home-Based Business Insurance? 5 Questions to Ask

There are many benefits that come with running your business from home. This includes convenience, flexibility as well as comfort. With all this being said, many home-based business owners don’t consider the risks associated with running an organization from their house. This poses the question — “Do I actually need insurance for my home-based business?”

While you may scoff at the question at first, thinking it’s unnecessary, the truth is that just like any other business, having the proper coverage provides essential protection safeguarding everything you’ve worked for. But don’t just take our word for it. Instead, to help you make an educated decision about your options, we’ll delve into five critical questions to ask yourself. When it’s all said and done, you’ll have a solid understanding of why home-based business insurance is so essential.

Question #1: Do You Have Expensive Inventory or Equipment?

One of the first things to think about is whether or not your home-based business involves inventory or expensive equipment. Your homeowners’ insurance probably doesn’t cover business-related objects in the case of damage, theft, or loss, even if you work from home.

Think about things such as your laptop, tools, technology or any other equipment that’s vital to your business operations. Then consider any inventory. Do you sell goods? If the answer is yes, these items could also be in danger without the proper protection. In the unfortunate case of a fire or break-in, you may have to replace these valuables out-of-pocket.

Why This Question is Important

Your operation relies on your inventory and/or equipment and without it your business is probably not functional.
Without home-based business insurance, replacing these items may be very expensive or unaffordable.
Homeowner policies alone usually don’t cover inventory or equipment losses.

Question #2: Do Clients or Customers Ever Visit Your Home?

Do you ever hold meetings at your house office with customers or clients? If so, you might be putting yourself in danger for responsibility if an incident occurs. For instance, you can be liable for a client’s medical costs if they trip and fall on your property, leading to an expensive lawsuit.

General liability insurance covers property damage and physical injury claims made by third parties. Even if your place of business is your house, this type of coverage it’s still necessary for any company that deals with clients or consumers face-to-face.

Why This Question is Important

Hosting clients without the proper home-based insurance leaves you liable in the case of an injury
General liability coverage will take care of the costs of lawsuits or claims relating to an accident, so you won’t have to pay out of pocket.
Having general liability coverage puts clients at ease and bolsters your reputation as a responsible business owner.

Question #3: Could a Lawsuit Affect Your Financial Stability?

If you own a small business and are on a strict budget, a lawsuit could be extremely detrimental to your business. Even a small claim could have a huge negative impact. In addition to an injury-related incident, clients may also file lawsuits if they think you’ve committed a professional error or if they feel you failed to provide a promised good or service.

Unfortunately, the legal and court costs stemming from these types of situations can add up quickly and jeopardize your finances. That’s why it’s so crucial to consider investing in professional liability coverage on top of the general liability protection that we discussed above.

Why This Question is Important

Small businesses suffer far more than large corporations in the result of lawsuits since they generally don’t have nearly as much funds or resources.
Professional liability coverage takes care of legal fees, court fees, and other payouts associated with a business error.
Without coverage, a lawsuit could be so expensive that you’re forced to sell your assets.

Question #4: Do You Rely on Your Home-Based Business for Income?

If your home-based business is your main source of revenue, you should think about how an unplanned disruption could affect it. What would happen if your home was damaged by a fire, a natural disaster, or some other unanticipated incident that prevented you from using it for several weeks or even months?

Business interruption insurance acts as a safety net paying for lost income during these unexpected down times. This coverage guarantees that, even while your business is recuperating you can continue to fulfill your financial and client obligations, pay your bills, and provide for your family.

Why This Question is Important

Without business interruption insurance, an unexpected event may force your business to shut down entirely, therefore bringing your income to a halt.
This coverage oftentimes provides relief in the form of a new, temporary space to operate out of.

Question #5: Do You Use a Vehicle for Business Purposes?

While this question isn’t directly related to your home, many remotely-based entrepreneurs utilize vehicles in their day-to-day operations. Unfortunately, if you’re regularly using a car, truck or van for business purposes, your personal auto coverage probably won’t cover it.

Consider tasks such as delivery, client visits, or inventory transportation. If any of these are applicable to your company, and you aren’t properly covered, you’ll be financially liable for any accidents on the job. This is where commercial auto insurance comes in, protecting your business vehicle in the case of an accident during the work day.

Why This Question is Important

When using a vehicle for purposes related to your business, personal car insurance policies will not be enough.
If an accident occurs while you’re conducting business, you won’t have to pay out of pocket.
Without commercial auto insurance, you’ll be held liable for any vehicle damage, personal injuries or lawsuits stemming from the accident.

Final Thoughts on Home-Based Business Insurance

If you run a business from the comfort of your house, investing in home-based business insurance is crucial. Even if you still aren’t sure whether it’s necessary for your organization or not, just review the five questions listed above. If your answer to any of these questions is yes, home-based business insurance is likely a smart investment.

It’s important to get ahead of potential risks before they actually take place. If you decide not to, it could cost you an exorbitant amount of money, or even your entire business. So don’t wait for any surprises, instead, take time to review your coverage options, and find a plan that best fits your small businesses needs.

Visit EZ.Insure For Your Business Insurance Needs

We understand that shopping for business insurance isn’t fun and it can be confusing too. Luckily for you, there’s a platform that makes finding insurance quick and easy. We’re of course talking about EZ.Insure. At EZ we pride ourselves on the seamless, simple platform that we’ve built out. All you have to do is enter your ZIP code and in a few minutes you’ll be matched with a customized insurance quote for free! We also have side-by-side plan comparison tools so you can be sure to find the perfect coverage. To get started, fill out the form above or call us directly at 855-694-0047 to get started!

5 Essential Reasons Why Your Business Needs Insurance

Imagine putting in years of hard work, money, and passion to establish your business, only to have it all come crashing down due to an unforeseen event. It could be as minor as a lawsuit from a dissatisfied customer or as severe as a fire that destroys your office. These unexpected incidents can not only disrupt your operations, but also jeopardize your company’s future and existence. That’s where business insurance comes in. Business insurance provides a layer of security, so your organization can keep thriving for years to come.

Take natural disasters for instance. According to a study by the Federal Emergency Management Agency (FEMA), “Almost half (43 percent) of small businesses affected by disaster never reopen after the disaster…” This alarming statistic highlights the need of having business insurance in place. To help drive home the point, let’s explore 5 essential reasons why your business needs insurance to secure its existence and future.

#1 To Protect Against Liability Claims

The first reason why your business needs insurance comes down being sued. A single lawsuit, whether it’s a malfunctioning product, a slip-and-fall accident, or anything else, can result in thousands or even millions of dollars in expenses. Potential costs include things like medical expenses, legal expenses and settlement payouts. Without the proper policy in place, your company will have to pay out of pocket and oftentimes leads to bankruptcy.

To emphasize the importance of insurance, let’s explore a real-life hypothetical example. Say a small restaurant is sued because a customer spills hot coffee on themselves, and there is no warning label. This lawsuit could easily amount to over $100,000 in legal and medical fees. With no liability insurance in place, the owner could have to shut down, or go into debt in order to handle the situation. So what’s the solution?

Solution: General liability insurance protects your company from lawsuits like these by paying for legal fees, medical expenses, and even settlements, so your company does not bear the financial burden of a legal fight. This form of insurance provides peace of mind by ensuring that a single lawsuit will not destroy everything you’ve fought for.

#2 To Safeguard Your Business Assets

The second reason why your business needs insurance is to protect its physical assets. Whether it’s the office space you work out of, equipment you use, or your product inventory, it’s all valuable assets that your operation relies on. Some common disasters having the potential to destroy business assets include:

Natural disasters (wind, rain, snow, hail etc.)
Burglary/Robbery
Vandalism
Fire

Without insurance, the expenses of restoring or replacing these assets affected by one of these factors may be overwhelming or impossible. Take this story covered by Business Insurance USA. A local florist’s shop suffered major structural damage after a severe hailstorm. Much of the inventory was destroyed, and windows were shattered.

Solution: Luckily in this case, the business owner had a commercial property insurance policy which covered the costs of repairs and replacement items. Commercial property insurance safeguards the physical assets of a business, when one of the above mentioned disasters takes place. Having this protection in places helps businesses recuperate quickly to avoid long-term financial losses.

#3 To Ensure Business Continuity

Theft, accidents and natural disasters are all physically damaging, but they can also cause your business to shut down for an extended period of time. This leads us to the third reason, why your business needs insurance—so your company can stay afloat during an unexpected interruption. Think about it…if you can’t run your business, how will you pay for regular expenses like employee salaries and rent?

Solution: Business interruption insurance is crucial for businesses to protect themselves against income loss due to unforeseen events. When a disaster strikes, having a bus

iness interruption policy can be the difference-maker between needing to close down indefinitely or being able to open up a couple months later. It generally covers expenses such as:

Lost revenue.
Ongoing expenses.
Costs associated with moving to a temporary location.

#4 To Build Trust and Credibility

In any industry, it’s important to have a credible and trustworthy reputation. Clients, consumers, and partners want to know that they are working with a reputable business. Otherwise, they’ll likely do their own research and work with one of your competitors instead. A great way to bolster your organization’s image is by having adequate insurance coverage. Safeguarding your business demonstrates that you’re prepared for the unexpected, letting colleagues know that you value their well-being and time.

In some industries, being properly insured has a huge impact on business dealings. For example, many individuals or businesses will not hire a contractor unless they first show proof of particular insurance coverage such as a professional liability policy. Having protection like this shows others that both parties will be protected in the case of an error or mistake. In the case of an accident or costly mistake without coverage, your business’s reputation could plummet, not to mention the expensive costs you’ll be forced to pay out of pocket. So what can you do?

Solution: Understand the risks involved in your line of work and industry, and in turn, get insured with the proper coverage. Doing so not only protects your company, but also protects clients and customers. Additionally, people will view your business as stable and trustworthy which makes it easier to form new relationships and foster long-term growth.

#5 To Ensure Compliance with Legal Requirements

In many industries, obtaining certain forms of insurance is not only a good economic move, but also required by law. Depending on your area and sector, certain coverage

types such as workers’ compensation or commercial auto insurance, are legally required. Failure to comply with these laws may result in significant fines, legal action, or possibly the closure of your business. Also, if you regularly perform contracted work, it’s vital to pay attention to contractual requirements in addition to state and federal mandates. For the failure to provide workers’ compensation insurance common penalties in many states include fines upwards of $50,000 and the suspension of business operations. So how do you avoid this happening to you?

Solution: Understand which forms of insurance are legally required for your business to be compliant. Workers’ compensation is required by law for all businesses in all states other than Texas. Additionally, coverages such as commercial auto insurance and professional liability are mandatory in many industries. With that being said, requirements are always on a case by case and state by state basis, so if you’re unsure about your business being compliant, we recommend performing your own research.

Final Thoughts on Business Insurance

While it’s tough to plan for the unexpected, it’s important to understand the most common business risks and the corresponding solutions to protect against them. To help you get started on this venture we’ve explore 5 essential reasons why your business needs insurance which includes:

Protecting against liability claims that could result in financial devastation.
Covering your business assets, such as your property, inventory and equipment.
Ensuring that your company stays afloat after an unanticipated disruption.
Increasing your organization’s credibility and customer confidence.
Avoiding hefty legal penalties by complying with legal and contractual obligations.

Don’t let your business go unprotected for any longer. Instead, visit EZ.Insure. Our quick and easy process gives you access to a free business insurance quote, comparison tools, and a team of insurance experts to help you find a policy customized to fit your needs. Plus, EZ.Insure also has an in-depth resource library filled with dozens of informational blogs to help you become more informed about protecting your company from risks. To get started, simply enter your ZIP code at the top of the screen or call us at 855-694-0047.

FAQs

Question: Which types of insurance are required for my business?

Answer: The type(s) of insurance you need is determined by your industry, geography, and individual hazards. However, important coverages usually include general liability insurance, commercial property insurance, workers’ compensation, and professional liability insurance. A business insurance professional can assist you in designing a policy that meets your specific requirements.

Question: How much can I expect to pay for business insurance?

Answer: The cost of business insurance varies depending on the size of your company, the industry you’re in, and the coverage levels you select. For example, small businesses often spend anywhere between $500 to $3,000 per year for general liability insurance, but it’s important to speak with an insurance professional to get a more specific estimation.

Question: Can I tailor my insurance policy to meet the specific needs of my business?

Answer: Yes! Most insurers provide customisable packages, allowing you to select the specific coverages that are appropriate for your business. This flexibility guarantees that you obtain the protection you require without having to pay for coverage you don’t.

5 Disasters Covered by Business Hazard Insurance

Disasters are unpredictable, and without the proper coverage, they can cause devastating financial losses for your company. That’s why business hazard insurance is critical for safeguarding against a wide range of potential hazards. From fires to vandalism and everything in between, hazard insurance ensures that your company is financially equipped to deal with damages and inconveniences caused. To understand why this coverage is important for your organization, let’s examine five frequent disasters covered by business hazard insurance.

Business Hazard Insurance for Fires

Fires are one of the most serious hazards that any business can face. Not only do they pose a threat to employees’ physical well-being, but they also have the potential to cause irreparable damage to facilities, documents, technology, and really anything else in their path. Fires are caused by a variety of circumstances including:

Electrical Issues
Cooking Accidents
Wildfires
Chemical Accidents
Smoking
And much more…

When it comes to dealing with the aftermath of a fire, business hazard insurance provides coverage for things like:

Structural repairs and rebuilding.
Replaces destroyed or damaged inventory.
Provides coverage for lost wages during the interruption.

Take the state of California for example. In a region that is known for its frequent wildfires, business hazard insurance is a must. While damage from natural disasters, in the aftermath of these events, businesses with sufficient protection will be able to start rebuilding, while the owner’s with no coverage may not be able to recuperate their losses.

Business Hazard Insurance for Storms

Storms and severe weather come in a number of forms, all of which can be extremely damaging to businesses and their property. Such events include windstorms, tornadoes, hail, snowstorms, and

more. During these unfortunate events, businesses face risks like structural damage, broken windows, loose debris, and erosion. While we suggest that all organizations invest in business hazard

insurance, it’s particularly important if your company is in a storm-prone area. In these cases, be sure that the policy includes some sort of comprehensive storm coverage.

In the event of a damaging storm, business hazard insurance usually covers:

Structural damage caused by winds and hail.
Broken windows, signage and roofs in need of repair.
Lost wages and other expenses caused by business interruption.

Business Hazard Insurance for Water Damage

Water damage can be catastrophic to businesses and while you should do everything possible to avoid these situations, sometimes they’re out of your control. While all policies vary, most business hazard policies cover claims involving water damage caused by leaks or burst pipes.

It’s important to note that business hazard insurance usually DOES NOT cover flood damage caused by rising water from hurricanes or extreme rain. For these circumstances, a separate flood insurance policy should be considered. Having a specialized flood insurance policy working in tandem with your business hazard insurance, ensures complete protection from all water-related incidents. With all that said, when it comes to water damage, be sure to read the fine print of your policy to understand what’s covered and what isn’t.

Business Hazard Insurance for Lightning Damage

Lightning strikes can cause significant harm to your business. Common damages caused by lightning include burn damage (if the lightning starts a fire), as well as damage to electrical systems and other equipment. The latter generally happens when a power surge takes place, which can affect any electrical infrastructure. Luckily, most business hazard insurance policies protect against lightning damage. In these scenarios, your policy should help to cover:

Damaged equipment
Structural damage
Wages and expenses caused by the business interruption.

Lightning strikes are unpredictable and can happen anywhere, so it’s important to have a comprehensive protection plan in place. In the aftermath of a damaging lightning strike, business hazard insurance will help your organization to recover quickly without facing large out-of-pocket expenses.

Business Hazard Insurance for Vandalism and Theft

While most of the hazards we’ve discussed involve the weather, remember that not all risks come from natural disasters. Unfortunately, two of the most common business damages are theft and vandalism. When we talk about theft and vandalism, it usually refers to goods being stolen, property being damaged, or defaced in some way. In most cases, business hazard insurance will protect against such incidents by covering:

The repair costs of vandalized property.
The replacement costs of stolen inventory or goods.
The costs of security upgrades to help avoid future issues.

Protect Your Company From The Unexpected

Whether it’s a fire, tornado, break-in, burst pipe or power surge, business hazard insurance will protect your organization from financial ruin. Without adequate protection these distatars can

result in huge out-of-pocket expenses, or the need to shut down for an extended period – both of which could destroy your business. When considering your needs in relation to business hazards, it’s important to understand what you’re already covered for. Then, based on a variety of risk factors such as the nature of your business and your geographic location, consider adding on additional protection.

Don’t wait for disaster to strike. Instead, be prepared and get a free quote from EZ.Insure. Our easy-to-use comparison platform allows you to view competing plans side-by-side, ensuring that you find something that matches your budget and needs. We also have a library of articles, all aimed at helping business owners save money and stay protected. So what are you waiting for? To get your quote just enter your ZIP code at the top of this page, or call us at 855-694-0047.

Professional Liability vs E&O vs Malpractice

It’s time to settle something once and for all. Are all types of liability insurance created equally? The quickest answer is, of course, no. General liability covers the physical damage that we often think of when we think of commercial insurance: property damage or a personal injury that happens on your premises. But then we come to the policies that protect businesses against the costly mistakes they could make: professional liability, errors & omissions, and malpractice. If you’re wondering whether these three terms can be used interchangeably, read on for clarification.

Professional Liability vs E&O

Professional liability and errors & omissions insurance, or E&O, are the terms that are often used interchangeably. Historically, these two types of policies were actually different. Professional liability was bought by professionals such as doctors and lawyers. E&O was for semi-professionals such as accountants and real estate agents. Nowadays, most people don’t make this distinction between them, and use either term when talking about insurance that covers mistakes or damages that do not involve injury to people or property.

There is, however, a small difference between the terms “professional liability” and “E&O.” Professional liability is actually more of an umbrella term that includes policies like E&O, directors and officers liability insurance (D&O), and employment practices liability insurance (EPLI).

This small difference is also related to what type of business you have. If you’re a consultant, engineer, or accountant, you’ll probably have a professional liability policy. These policies are also highly recommended for estheticians, hairdressers, yoga instructors, personal trainers, or anyone who offers a service to customers that has a risk of going wrong. However, if you’re an accountant, real estate agent, tech professional, or anyone who could make an “error” or “omission” when giving advice, then the policy you buy is more likely to be called E&O insurance.

Malpractice

If professional liability and E&O are essentially the same thing, then is professional liability the same thing as malpractice insurance? Well, no. As described above, the term “professional liability” is an umbrella term for insurance policies that protect businesses against lawsuits stemming from mistakes. Malpractice is a type of professional liability insurance, but professional liability is not necessarily malpractice insurance.

Malpractice is industry-specific, required for doctors and often bought by lawyers. The idea behind the coverage is essentially the same: professionals pay premiums to be covered in case a patient or client alleges damages due to negligence. What is different in this case is who it covers.

Insurance can be complicated. It can often seem like you need to learn a whole new vocabulary just to figure out what your business needs. Remember, you need to be covered for all eventualities. You don’t want to see all of your hard work go to waste because of one costly mistake. You wouldn’t risk your property being uninsured, and you should be just as serious about insuring yourself against unseen damages. If you are offering a service or advice to your customers/clients, then you should have some form of professional liability insurance.

If you’re looking for the right insurance for your business, EZ.Insure is the best place to look. We offer instant quotes and access to local, knowledgeable agents – for free! We’ll answer all of your questions, and will find you just what you’re looking for at just the right price. Easy as that. To get started simply enter your zip code in the bar above. You can also speak to a licensed agent by calling (855) 694-0047.

Does Commercial Insurance Cover Vehicles?

Food truck business owner holding pizzas in front of a vehicle. Text reads, "Does business insurance cover vehicles?" Commercial insurance, also known as business insurance, is essential to protect your company against a variety of risks. However, a question often arises— does commercial insurance cover vehicles? Understanding the various aspects of commercial auto coverage within a business insurance policy can help you avoid costly gaps in coverage. In this blog, we explore the relationship between commercial insurance and vehicles and why commercial auto insurance might be necessary for your company.

Understanding Commercial Insurance

Commercial insurance is a type of comprehensive policy used by business owners to protect organizations from various financial losses. Losses include things like property damage, theft, workplace injuries, liability claims, and much more. Oftentimes commercial insurance policies are bundled to include a variety of different coverage types. These comprehensive policies are often referred to as business owner’s policies (BOPs) and they typically include:

Property Insurance: Provides coverage for damage to equipment, buildings or any other assets owned by a business. Typical accidents covered include fires, theft and natural disasters.
Liability Insurance: Protects companies from any claim involving injuries or property damages caused by the businesses employees, products or operations.
Workers’ Compensation: Covers the medical costs and a portion of lost wages to employees who get injured or sick on the job.
Business Interruption Insurance: If a business is forced to close down temporarily, this coverage will provide compensation for lost income. Examples of reasons a business might need to close down are natural disasters, or fires.

There are also other more specialized types of commercial insurance that can be crucial depending on the industry you work in. These include professional liability insurance and cyber liability coverage. Additionally, companies that regularly use vehicles in their daily operations need specialized coverage too. This is where commercial auto insurance comes into play.

What is Commercial Auto Insurance?

Commercial auto insurance is designed to protect vehicles used for business purposes. Unlike personal automobile coverage, it covers a broader range of business-related risks.

For example, if you have a fleet of freight trucks, delivery trucks, use your personal vehicle for work purposes, or have staff driving company White commercial van driving on the highway. cars, a commercial auto coverage will ensure that these vehicles are fully protected. There are also many cases where commercial auto insurance is actually required by law. This includes:

Company-owned vehicles being used for deliveries or client visits.
Any personal vehicles that are commonly used for business purposes.
Heavy-duty vehicles like semi-trucks or commercial trailers.
Vehicles that employees drive on behalf of a business.

Keep in mind that every state and industry has different rules and regulations, so we also recommend looking up your local laws to avoid legal issues.

When Does Commercial Insurance Cover Vehicles?

Although business insurance covers a variety of risks discussed above, vehicle coverage is usually excluded. There are some cases where a BOP or general liability policy may offer some coverage for vehicles occasionally used for business purposes, but this is not common. Even in these cases, the coverage is usually limited and won’t cover vehicles that are used on a regular basis by the business.

With all this being said, businesses using vehicles in their operations regularly need specialized commercial automotive protection. Otherwise, you run the risk of paying out of pocket in the case of an accident.

What Does Commercial Auto Insurance Cover?

A commercial auto insurance policy provides complete coverage for vehicles utilized for business purposes. Typical coverage includes:

Liability Coverage: This coverage protects against bodily harm or property damage if you are the driver at fault in an accident.
Physical Damage Coverage: This coverage includes both collision and comprehensive coverages for vehicle damage. Collision insurance covers damage to your vehicle from hitting another object or vehicle, regardless of who’s at fault. Comprehensive coverage protects your vehicle from events outside of your control including theft, vandalism, fire, an animal being hit and more.
Uninsured/Underinsured Motorist Coverage: This policy protects your company if an employee is involved in an accident with an uninsured or underinsured driver.
Employee Coverage: Provides protection for employees who drive company-owned automobiles.
Additional Coverage Options: To assure complete coverage, you can add services such as rental reimbursement and roadside assistance to your plan.

Do You Need Commercial Auto Insurance?

Deciding on whether or not your business needs commercial auto insurance depends solely on how vehicles are used within your daily operations. If the company uses vehicles for transportation, delivery, or regular travel, a commercial vehicle policy is essential. On the other hand, relying entirely on a personal auto policy for business purposes leads to big financial risks.

If you still aren’t sure about your business and it’s needs relating to auto coverage, ask yourself the following questions:

Do you or your staff drive for business purposes?
Is your personal vehicle routinely used for work-related purposes?
Are there any company-owned vehicles in your fleet?

If you answered yes to any of these questions, commercial auto insurance is likely a good investment.

Protecting Your Business: Steps to Take

To guarantee that your business is properly insured, take the following steps:

Examine your current insurance policy to detect any gaps in vehicle coverage.
Assess your company’s vehicle usage to decide whether a commercial auto policy is required.
Consult with an insurance agent to create a commercial auto insurance plan that is tailored to your specific business needs.

Final Thoughts

Commercial auto insurance is an important aspect of protecting your business, but typical business insurance policies tend to fall short. Whether you use personal cars for business or operate a fleet of commercial vehicles, you must have the proper insurance in place. Understanding the significance of commercial auto insurance can help you protect your organization from vehicle-related dangers and ensure your company is protected from all angles.

While researching and shopping for insurance policies can be daunting, it doesn’t have to be. Using EZ.Insure to compare quotes and coverage types makes the process easy. We offer side-by-side comparisons, so no matter how big or small your business is, they’ll be something for you. We also have a team of dedicated insurance professionals who are always on hand to walk you through the process. So take the next step in protecting your business and its assets today by visiting us at EZ.Insure. To get started, simply enter your ZIP code at the top of the screen or give us a call at 855-694-0047.

Workers’ Compensation For The Self-Employed

Although workers’ compensation is generally for employers to have for their employees it also covers you if you’re self-employed, such as an independent contractor. Just because you work for yourself doesn’t always mean workers’ compensation is optional for you. Almost every state requires that companies give workers’ compensation insurance to their employees. Each state has a list of companies and employees that need to be covered and a list of employees or owners that are exempt. So, if you run a business as a sole owner, your state may not require you to buy workers’ compensation insurance. However even if you’re not required by law to have coverage, your clients might.

Depending on your industry, clients may add it to their contract with you that you need to carry workers’ comp. For example general or subcontractors typically have to have workers’ compensation for someone to hire them to do work for them. This is because workers’ compensation policies typically don’t extend to any contractors you hire on temporarily. Most health insurance policies don’t cover accidents that happen at work. Let’s say you work for yourself and have health insurance. You hurt your back at work when you picked up a big box. If you got hurt at work, your health insurance might not pay for your hospital bills. This means that you have to pay for all the costs and fees connected to your injury.

If you work as a freelancer, the same thing will happen. Even if you have health insurance, you should still have workers’ comp coverage. It can help you avoid a situation that will ruin your finances. You may also need it if you hire freelancers or independent contractors for specific projects.

Self-Employed Workers’ Compensation

It might seem strange to buy workers’ compensation for yourself, but it happens all the time. Many companies won’t hire you as a self-employed worker unless you have workers’ compensation insurance. This is because, if you get hurt on the job, you might be able to sue the company to pay for your medical bills. Even though you’re an independent contractor, businesses know that the courts will probably order them to pay. Unless they buy workers’ compensation for you or you have it for yourself. A company can legally refuse to hire a self-employed worker who doesn’t have sufficient workers’ compensation insurance.

If you are self-employed as a sole owner and get paid through a 1099 instead of a W-2, you might not have to get workers’ compensation insurance. People often think that you only need workers’ compensation if you have people working for you. But that’s just not true for some kinds of businesses.

Why Independent Contractors Need Workers’ Compensation

Most state rules don’t require independent contractors to have workers’ compensation insurance. But you may still need to buy this policy for a few reasons.

1. Clients Require It

Your clients may want you to have workers’ compensation and other types of small business insurance to protect them from danger. If you get hurt at work, they could be held accountable and have to pay for your medical bills. By asking you to have workers’ comp insurance, they know that if you get hurt on the job, they will be financially protected. When you buy a workers’ compensation package, your clients save money because they don’t have to pay for your protection. But make sure you’ve taken that cost into account when you set your fees.

2. Unexpected Injuries

You could get hurt at work even if you don’t do any hard work. A software worker could get carpal tunnel syndrome from years of typing on a keyboard. Working inside a computer, a person who fixes computers could cut their hand and be out of work until it heals. Workers’ compensation pays for medical care when you get hurt on the job, even if it’s because you tripped in your office. This includes going to the doctor, getting medicine, and going to physical therapy. If you get hurt at work and have to take time off, workers’ comp will pay you some of the money you would have made.

This may seem like something that would be covered by health insurance. But insurers can turn down claims for accidents that happen at work. Medical bills can also add up quickly. And if your employee takes a long time to get better, workers’ compensation payments can save your business. So, even when it’s not required, independent contractors and single proprietors may choose to buy this coverage for themselves.

3. The Law

Outside of the construction business, most state laws do not require independent contractors or self-employed owners to have workers’ compensation. States have strict rules about who can be an independent contractor, and companies who misclassify their workers could get in trouble. Even if you call yourself a “freelancer,” you might still have to carry workers’ compensation if you’re really an employee. This is the responsibility of the employer, and most states let one-person businesses choose not to have workers’ compensation benefits.

However, if you are required to have insurance for yourself or your employees and you don’t buy a policy, you could be fined significantly or be held responsible for their medical bills if they get hurt on the job. It’s important to learn about the rules in your state about workers’ compensation. Some states require protection for every kind of employee connection. Including 1099 employees, independent contractors, full-time and part-time employees, and freelancers.

Self-Employed Workers’ Compensation Exemption

In some states, you can get out of having to get workers’ compensation if you are a sole proprietor. A workers’ compensation exemption is a statement that you don’t need insurance because you don’t have any employees. For example, you can’t renew your general contractor license in California unless you have proof of coverage or a valid waiver for sole proprietors. To get a workers’ comp exemption for a sole proprietorship, you’ll need to fill out the right form for your state, take it to be notarized, and generally pay a small fee. You won’t have to pay for workers’ comp, but if you get hurt at work, you might have to pay out of pocket to cover your bills.

What If I Hire An Independent Contractor

When you hire your own contractors or subcontractors, you take on the responsibilities of a big employer. In some situations, like when an employer’s business has a lot of natural risks, it may make sense to require contractors and subcontractors to carry their own insurance so you don’t have to.

Your lawyer can help you decide if it’s a good idea to ask the people you’re doing business with for workers’ comp. They can tell you not only about the rules and laws where you live. But also how to change your job contract to include language that says coverage is required. Even if a worker has a 1099 status, like a 1099 contractor, the company is still responsible for paying any workers’ compensation claims. Legally, 1099 contractors only need workers’ compensation coverage if their boss requires them to have it. However, it may be in their best interest to carry a certificate of insurance to protect themselves and get contracts with future clients.

Other Self-Employed Insurance Options

While we’re talking about workers’ comp, it’s important to note that sole owners often need to buy other types of business insurance.

General Liability

Liability insurance will protect you financially if someone sues you for damages after slipping and falling in your coffee shop or breaking an expensive vase while you’re cleaning a client’s home. General liability insurance also pays for slander claims. This kind of safety can be bought as a separate policy or as a part of a policy for a business owner.

Professional Liability

Listen, everyone has flaws and makes mistakes. In this case, professional responsibility is helpful. It’s insurance that protects you if a client gets hurt because of a job you did for them or advice you gave them. It is also called errors and omissions insurance, which is a more popular name. Professional liability insurance covers cash losses in case of injury or damage. While general liability insurance covers injuries and damage to property.

Cyber Liability

In the business world, there are always physical risks like getting hurt or losing something. There are, however, risks that come with using technology that could hurt your business. Hacking and data leaks are just two examples. Hackers are very interested in the names and medical records of your customers that you store on company computers. In order for your business to quickly get back on its feet after a data breach or cyberattack, it is important that it has data breach or cyber liability insurance.

Business Owner’s Policy

By mixing two types of coverage, a business owner’s policy (BOP) protects your small business from a wide range of claims. Its coverage includes both commercial general liability insurance and commercial property insurance. The “general liability” part of a BOP protects your business in case someone sues you or your company. General liability insurance protects you from lawsuits if something like a customer slipping on a wet floor, a faulty product damaging a client’s property. Or a claim that your goods or services hurt someone. It can also protect you from claims related to libel, slander, and some types of advertising.

The property part of a BOP helps protect your business’s buildings, tools, furniture, and stock. Whether you own them, rent them, or lease them. It helps pay to fix or replace things that were stolen, damaged, or destroyed while they were in your care. Even if they didn’t belong to you. It can also pay for things like rent, salary, and other bills while your property is being fixed or replaced after a fire or another covered loss.

Working With EZ

Being self-employed or a a freelancer gives you more freedom and a better mix between work and life. One downside is that you’ll have to take care of your own insurance. This is something you must do. If you don’t have the right insurance, an accident or emergency could put you out of money. So, people who work for themselves and don’t have insurance are taking a chance by not getting it. EZ can help, though! We can give you free, quick quotes on business insurance, and we can also help you find the best plans for you. Enter your zip code in the box below or call 877-670-3557 to talk to a qualified agent.

Question #1: Do You Have Expensive Inventory or Equipment?

Why This Question is Important

Question #2: Do Clients or Customers Ever Visit Your Home?

Why This Question is Important

Question #3: Could a Lawsuit Affect Your Financial Stability?

Why This Question is Important

Question #4: Do You Rely on Your Home-Based Business for Income?

Why This Question is Important

Question #5: Do You Use a Vehicle for Business Purposes?

Why This Question is Important

Final Thoughts on Home-Based Business Insurance

Visit EZ.Insure For Your Business Insurance Needs

#1 To Protect Against Liability Claims

#2 To Safeguard Your Business Assets

#3 To Ensure Business Continuity

#4 To Build Trust and Credibility

#5 To Ensure Compliance with Legal Requirements

Final Thoughts on Business Insurance

FAQs

Business Hazard Insurance for Fires

Business Hazard Insurance for Storms

Business Hazard Insurance for Water Damage

Business Hazard Insurance for Lightning Damage

Business Hazard Insurance for Vandalism and Theft

Protect Your Company From The Unexpected

Professional Liability vs E&O

Malpractice

Understanding Commercial Insurance

What is Commercial Auto Insurance?

When Does Commercial Insurance Cover Vehicles?

What Does Commercial Auto Insurance Cover?

Do You Need Commercial Auto Insurance?

Protecting Your Business: Steps to Take

Final Thoughts

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Self-Employed Workers’ Compensation

Why Independent Contractors Need Workers’ Compensation

1. Clients Require It

2. Unexpected Injuries

3. The Law

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What If I Hire An Independent Contractor

Other Self-Employed Insurance Options

Working With EZ

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