Why Self-Employed Liability Insurance is Crucial

April 27, 2023 | Insurance 101

This article was originally published May 02, 2022

For people who work alone or own a small business, self-employed liability insurance to cover various types of business risk is essential. Without proper business insurance for self-employed people, one lawsuit can result in a financial burden that ends in bankruptcy.

Fortunately, you can get affordable small self-employed liability business insurance quickly and conveniently online from biBERK. Talk with one of our team members about getting properly insured for safety, security, and peace of mind, so you can get on with the day-to-day running of your company.

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Business Insurance for Self-Employed Workers

biBERK offers seven types of small business insurance for self-employed workers. Depending on the type of small business you own and run, you might need one or all of these. If you’re unsure about what to purchase, you can always talk with one of our licensed insurance experts. They can advise you on what’s needed for people who are self-employed.

  1. Workers’ compensation insurance. Self-employed individuals can get workers’ comp insurance to protect themselves if they’re hurt while working. In the event of a work-related injury or illness, it can cover medical costs, legal fees, and lost wages. There is also a death benefit. If you do work as a subcontractor, you may be required by the company hiring you to have this type of self-employed liability insurance.
  2. General liability insurance. This insurance covers injuries to your customers and other people you don’t employ, damage to the property of others, slander, libel, and copyright infringement. If, for instance, you’re a self-employed electrician and accidentally damage an expensive light fixture in a customer's home, this policy could cover the replacement cost. General liability insurance is needed in a wide variety of industries, including contracting, auto service and repair, wholesale and distribution, transportation, recreation, food service, and healthcare.
  3. Business owners policy (BOP). Also called property & liability insurance, a BOP combines general liability insurance for self-employed workers with coverage for company property. It provides broad protection in one easy-to-manage policy. It has the kinds of general liability protections described above, plus coverage for things like equipment. If you are, for example, a contractor and some of your tools are damaged, the repair or replacement cost may be covered. Virtually anyone who’s self-employed can benefit from a BOP.
  4. Professional liability insurance. Also called errors & omissions or E&O insurance, this coverage protects you if you provide professional advice or services and make a mistake in your work, such as completing legal paperwork for a client incorrectly. Professional liability insurance for self-employed business owners is needed by many types of professionals, including accountants, photographers, consultants, journalists, notaries, personal trainers, architects and engineers, barbers and beauticians, certified financial analysts, real estate agents and brokers, claim administrators, interior designers and decorators, corporate trainers, dog groomers, funeral directors, graphic designers, home inspectors, travel agents, insurance agents, social workers, tutors, and veterinarians.
  5. Commercial auto insurance. This insurance covers incidents that result from the business use of company-owned or leased vehicles. Often, personal auto insurance won’t provide coverage in those instances. For example, if you’re driving a vehicle leased by your business entity to make a delivery and are at fault in an accident, this type of policy can protect you.
  6. Umbrella insurance. Liability insurance policies for self-employed small business owners all have a maximum amount they will pay. Umbrella insurance can provide additional payment if that amount is exceeded for a covered risk. This insurance can kick in if, for example, you accidentally damage drywall in a customer’s home while doing electrical work and the cost is more than your biBERK general liability policy will cover.
  7. Cyber insurance. Purchased as an add-on to a general liability policy, professional liability policy, or BOP, this insurance covers costs associated with data security breaches in which fraud has occurred or is likely to occur. For example, this coverage can help if a client's credit card information is stolen. Any self-employed individual who handles sensitive information should consider cyber insurance.

In addition to the coverage these policies provide, you can add what are called endorsements. For example, both BOPs and general liability policies can have add-ons like hired and non-owned auto liability, employment-related practices liability, and employee benefits liability.

What Does Small Business Insurance for Self-Employed Workers Cost?

People who are self-employed are often pleasantly surprised when they get a free, self-service, online quote from biBERK and find that their small business insurance cost will be lower than they expected. That’s true, in part, because we don’t use middlemen or brokers. We insure you directly, which means you can save up to 20% over other insurance companies. See how much you could save by contacting us today.

You can even purchase your self-employed liability insurance policies online. And if you have questions, our licensed insurance experts are always happy to assist you.

How to Find Affordable Insurance for Small Businesses When Self-Employed

When self-employed and researching insurance for small businesses, there are some things to keep in mind, including:

  • To obtain contracts, particularly with larger companies, you may be required to have workers’ compensation insurance and/or liability insurance.
  • You want to work with a company that has extensive experience in self-employed business insurance.
  • You want to purchase policies from a company with the financial resources to support you if an incident occurs.
  • Small business insurance is an important investment, but you don’t want to pay any more than you have to for good, reliable coverage.

We’re part of Warren Buffett's Berkshire Hathaway Insurance Group with millions of satisfied customers, more than 75 years of insurance experience, and $38 billion in paid claims in 2020. We insure you directly, without middlemen or insurance brokers, which means you can save up to 20% over other insurance companies.

Ultimately, when you’re self-employed and you get your self-employment business insurance from biBERK, you know you’re getting excellent coverage at a great rate from an industry leader.