For many decades, having a job meant being an employee of a company—often for life.
Today, it’s a different story. That’s because many people are a part of the so-called gig economy of independent consultants who often move from one job to the next. This might mean selling goods through a network marketing company like Avon, moving products on Amazon or eBay, or running a home-based graphic design business. The trend is only growing: an Intuit study predicts that more than 40 percent of the U.S. workforce will be contingent workers by 2020.
Upsides like freedom and flexibility attract people to this kind of work. Yet there are downsides, too, like hustling to find jobs and managing a fluctuating income. Another lesser known one is not having enough— or even any—business insurance.
Fortunately, there are easy ways to fix that. Here’s how for some of the most common types of work.
You drive for a ridesharing service like Uber or Lyft
Did you know that you’re no longer covered by your personal auto policy as soon as you make yourself available as a driver? Before you accept a ride, be aware that Uber and Lyft only cover you for liability on a limited basis. They do provide more coverage when you accept a ride and when you have the passenger in your vehicle, but some of it (like collision damage to your own car) can be subject to high deductibles.
ERIE was the first insurer to offer a "business use” coverage designation on personal auto policies. The exact price varies by location and vehicle, but it’s about 30 percent more than the rate for people who never use their cars for business. Your ERIE Agent can help you find the right protection at the right price.
You’re involved in network marketing
Tupperware, LuLaRoe, Scentsy— there are lots of ways to make money selling products as a consultant. If you do, it’s worth considering extra protection.
Even if you sell something relatively harmless like clothing, you’ll still want to add an incidental business endorsement to your homeowner's insurance policy. It will protect you if you're hosting a professional party at someone else's house and accidently smash her antique vase. It also protects you if someone comes to your house for one of these parties and gets hurt.
You sell items on Amazon, eBay or Etsy
When you have a professional selling plan on Amazon, you’re required to have at least $1 million in business liability insurance. No insurance is required to sell on Amazon if you don’t have a professional plan or if you sell on eBay or Etsy. Still, it's worth considering, depending on how much business you do on any of these platforms, in case your inventory is stolen or someone is injured by an item you sold.
You run a business out of your home
Imagine that you're renting out a room via Airbnb and you accidentally break your guest's expensive camera. Or what if someone says you libeled or slandered them in the course of your business? In these instances and many more, you might not be covered, since homeowners and renters policies aren’t always designed to cover home-based businesses.
If it turns out you need extra coverage, you can add an incidental business endorsement to your homeowners policy. There are different kinds to fit your exact business—generally speaking, they’ll run you about $30 to $70 per year.
If your situation is more complex— for instance, you rent out more than half of your home or you have employees—then you may need to buy a separate commercial insurance policy and/or a
workers’ compensation policy.
Finally, you might also consider buying professional liability insurance. This type of coverage protects you if someone accuses you of doing inadequate or negligent work. A few examples could include a bookkeeper making a critical accounting mistake for a client or a real estate agent accidentally misrepresenting key information.
The bottom line is this: Whether you have a side hustle or draw a full-time income from your work, it’s a good idea to talk with your ERIE Agent about making sure you have the right coverage in place.