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If you’re a fan of Dave Ramsey, you know the value of a good side gig. Whether it’s starting your own baking business or driving for Uber, a side business can help you rake in extra cash to reach your money goals. And if you can reach your financial goals while doing something you love, why not?
There’s a lot to love about working hard at something you enjoy, controlling your own schedule, and making money while you’re at it. But as great as that is, your side gig can have some risks as well, especially when it comes to insurance. Most people don’t realize their personal home and auto insurance policies won’t cover work-related claims.
Without proper coverage, a big lawsuit, property loss, or business interruption could put your finances at risk. But getting your personal insurance right is complicated enough—how do you know if your side gig is covered? An independent insurance agent can unpack the right coverage for you, but for now, here’s what you need to know to keep your business and your budget intact.
Signs Your Side Gig Needs Extra Coverage
When you’re gazelle intense about taking control of your money, a nine-to-five job doesn’t always cut it. The good news is that there are lots of great side gig ideas that can help you bring in more income. A home-based business is a blessing because you can up your cash flow without missing out on precious family time.
How do you know you have the right insurance coverage?Take the Checkup
Whether or not you need business insurance really depends on your risk. But these questions are a good place to start.
- Do you use your car to get work done?
- Do customers or business packages come to your home?
- Do you work with children or animals?
- Do you process payment information or handle other sensitive material?
- Could anyone get hurt or sick as a result of your business?
- Is your side business a primary source of income?
- Would a lawsuit or inventory loss leave you broke?
You may think your side gig is too small to need insurance. But if you’ve answered yes to any of these questions, personal insurance may not be enough.
Related: Do you know how your side gig impacts your taxes? Find a tax expert who Dave recommends in your area today!
Cover Your Side-Business Bases
Without the right insurance coverage, you may be exposing you and your side gig to risks. Consider these potential scenarios:
- You bake cupcakes for a birthday party and someone has an allergic reaction.
- Your client’s dog bites a stranger on a walk around the neighborhood park.
- The mailman breaks his ankle on a loose step delivering a business package to your home.
- You get in a fender bender running a business errand.
- Your laptop is stolen and contains sensitive customer information.
- You post someone’s photo to your website without their consent.
- A house fire destroys your product inventory.
Let’s face it. Your side gig might be a safe bet 99% of the time—but life doesn’t always go as planned. Business insurance adds an extra layer of protection so bad luck doesn’t leave you broke.
The good news is business insurance doesn’t have to break the bank. Brandon Smith, one of Dave’s Insurance Endorsed Local Providers (ELPs) in Missoula, Montana, estimates that most business policies will cost $300–500 a year on average. An experienced insurance agent can weigh your risks and determine how much coverage is right for you.
“The rate is going to equal the risk,” Brandon says. “We want to cover what would financially devastate you, not inconvenience you.”
Got a Sharing Gig? Mind Your Coverage Gaps
Dave’s a fan of sharing gigs like Uber and Airbnb because they offer easy options for boosting your income. You get to be your own boss, set your own schedule, and meet interesting people. There’s a lot to love!
But these services ride a fine line between work and leisure, and your personal insurance policy may not be enough.
Brandon serves on a couple of insurance advisory councils and says sharing services are a hot topic industry-wide right now. “With Uber, you turn the app on, you’re in business. You turn the app off, you’re not in business,” he explains. “There’s a lot to look at, not just in terms of liability but also medical payments, uninsured motorist, comprehensive and collision.”
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Airbnb presents similar issues. “It’s difficult to get a policy for a short-term rental when it’s just a week here, a week there, and a primary residence in between,” Brandon says.
So what’s the solution? There’s still a lot of gray area, but options do exist. For instance, some insurance carriers offer add-on policies—called riders or endorsements—to bridge gaps between your personal insurance and coverage offered by sharing service companies.
If you’re considering a sharing gig to earn extra cash, that’s great! Just sit down with an insurance agent first to ensure you have proper coverage. You might pay a few hundred dollars up front, but the right policy could save you thousands in the end.
Here’s Your Next Step
You’ve worked too hard to see your greatest dreams wrecked by your worst nightmare. If you’re considering a side business—or you don’t have proper coverage for your current one—talk to an independent insurance agent today.
An independent agent works for you instead of a single insurance carrier. With access to a whole network of providers, they can find the best price on the coverage that’s right for you. It doesn’t cost a thing to sit down with a pro and discuss your options.
“I’ve been there, and I’m a believer in it,” Brandon says. “When we were in their seats several years ago, we had third and fourth jobs and worked from 7 a.m. to midnight seven days a week. When I sit across the desk, I’m not trying to sell an additional endorsement or premium. I’m trying to protect people because I know the reward is much greater than the risk.”
Our ELPs know how hard you’ve worked to take control of your money, and they’ll help you find the best coverage to protect your side gig.
Looking for an independent agent you can trust? Contact one of Dave’s Insurance ELPs today!