If you’re a new online entrepreneur, I’m sure you’ve realized how much there is to read up on and prepare for when it comes to being ready to successfully run a business on your own. One of those big things that so many people overlook are the different types of insurance you need to make sure you’re protected in all circumstances as a business owner.
When you’re coming for a full-time gig that has had you covered in insurance, it’s understandable that you might not realize what all is involved in that coverage. But I can’t stress how important it is to take ownership at this point for the protection of yourself, your family, and all things related to your business.
Today, I’m going to help you start that process by walking you through the different types of coverage that are offered and why you might need them.
Why you need personal insurance and business insurance
The first thing you need to realize as a new online entrepreneur is that you need more than just business insurance to make sure you’re protected against anything that may come along. You need to think about insurance in two baskets: personal and business. And the natural first place to start digging into insurance is on the personal side.
Personal insurance for bloggers
As a small business owner, operating out of your home, the best place to start looking into insurance is by reviewing your existing personal lines of coverage. Personal insurance is a factor that so many new online entrepreneurs tend to be less attentive to, but can actually get you into a lot of trouble if you don’t have it. This is what will protect yourself, your family, and your income if something unexpected comes up. These are the types of personal insurance you need to look into:
This is something you most likely already have as a homeowner. But if you’re working from home, you should call your home insurance agent to see what your current coverage entails and if there is anything you can add.
When you call the agent, be specific. Tell them you’re running a business out of your home and find out if there are endorsements to provide greater protections, if there are other coverages you have, and what gaps might exist in your coverage.
Car insurance is also something you most likely already have. Many online entrepreneurs might not need their vehicle for work purposes, but there are some bloggers who will need to check in on their current coverage. For example, if you’re a photographer and are hauling your gear to gigs, you’ll want to have your vehicle covered for business purposes as well as personal purposes.
You might not realize it, but your personal insurance might already cover certain business aspects. Make sure to review your policy with your insurance agent to find out.
Thinking about buying a new vehicle for your company? If so, you’ll need to purchase a commercial auto policy. And if you have an employee driving the vehicle for anything as small as errands, you’ll want to talk to your insurance agent to make sure you’re appropriately covered for that as well.
Health insurance is the most obvious type of insurance that most business owners are already thinking and planning for. When you’re transitioning from a job that provided your health insurance, make sure to do your homework on what type of coverage, deductibles, and networks you’ll need. In some cases you’ll be able to transition to your spouse’s insurance, so don’t forget to check if that option is available for you.
Life and disability insurance
If you and your family are dependant on your income as a blogger, you’ll want to have a backup plan in case the unexpected comes up. Life and disability insurance is that back up plan.
You can own disability insurance on a personal level and have it cover your business overhead expense if you are unable to perform your duties. This will help you continue to receive an income and insure your future and your business’ future.
When you’re planning on transitioning from a place of employment to being self-employed, it’s important to go ahead and purchase disability insurance while you’re still employed. This is especially true if you are planning on jumping into a new industry with your self-employment.
This type of insurance is based on proof of your historical income. Once you have it, it doesn’t matter if you jump around or change your job, but to get it, they need a few years of proven income to insure you. So don’t forget to look into this while you’re currently employed.
Business insurance for bloggers
If I can stress one thing that I think is most important for you as a blogger and business owner when it comes to insurance is how important it is to take keep your business liability separate from your personal liability. This will help you protect your personal assets from being at risk.
For example, if you have a room in your home dedicated to creating videos and have a client get hurt in that room while filming, you don’t want your personal insurance to cover that incident. You need your business insurance set up to take that hit. That means you’ll also need separate banking accounts, credit cards, etc. for your business so that in the case you’re sued, your personal assets will be shielded.
General liability is that type of umbrella coverage for your business that will keep you protected against a myriad of issues. Some of these include:
- Copyright infringement
- Wrongful termination
- Sexual harassment
- Business property
And if you are a type of business that houses customer data, general liability will also protect you in the case that that data is breached– which is a very prevalent topic these days.
Your equipment may be covered under general liability, or you may need to purchase a separate policy to cover your business equipment. Either way, you should make sure your equipment is covered under this type of insurance. I’ve seen people too often assume that since they’re equipment is stored at home that their homeowner's insurance will cover it all, but that is not the case if it is for your business.
This type of insurance will cover you if an employee (and sometimes you) is injured on the job. Laws for workers compensation are different in each state, so make certain that you have adequate coverage for where you operate your business.
And even if you’re a sole proprietor, you’ll often be required to have workers compensation if you do work with a larger company. This happens so that the larger company can be absolved of this responsibility while you are working with them.
This is also known as errors and omissions. This type of insurance provides protection for damages against civil suits that relate to advise you have given to your client. It’s most prevalent for consultants to have this type of insurance.
For example, if you provide consulting advice to a client that the client later determines had a negative financial impact on them personally or professionally they may choose to sue you. If you are found to be professionally liable your errors and omissions policy will provide coverage subject to the limits and deductibles of the policy.
Are you sure you’re insured?
I know as you’re starting out, it’s easy to feel insurance poor as you begin to research all the different types of insurances you’ll need. However, don’t let it overwhelm you. Insurance must be one of your top priorities when starting a new business.
You need to take full responsibility for your coverage because if you don’t care about your money and assets, no one else will. Do your homework, ask questions, and find the right agent. They need to be a subject expert not only on insurance but also in your particular business industry so you can rest assured that you’re fully covered.
And don’t forget to annually review your coverage. Insurance policies and your business will change. As you grow and expand, you need to make sure your insurance can handle that growth as well. So every year, on the anniversary of your insurance policies make an appointment with your insurance agent to sit down and go over all of your policies.
But my challenge for you today is to take stock in your current policies. Take a 30,000 foot view of your current situation to assess what you’d be ready for today should something unfortunate happen and where you have gaps that need to be filled. So take a few minutes to call your insurance agent today and find out where you stand.