Get expert advice on every topic you need as a small business owner, from the ideation stage to your eventual exit. Our articles, quick tips, infographics and how-to guides can offer entrepreneurs the most up-to-date information they need to flourish.
Why Different Insurance Policies are a Must for Self-Employed Professionals
Posted by Kanika Sinha
November 13, 2023
Your secret weapon against unexpected and costly challenges.
Being an entrepreneur means establishing systems to address unexpected and costly challenges. One of the best tools for doing so is having suitable insurance coverage, particularly self-employed insurance.
Insurance serves as a vital protective armor for self-employed professionals in numerous ways. It shields them from the financial ramifications of unexpected mishaps, such as accidents, natural disasters, or liability claims. Thus ensuring that your hard-earned success remains intact, granting you peace of mind and the freedom to take calculated risks on your entrepreneurial journey.
Here are six reasons why self-employed professionals need insurance.
1. It lays the foundation of your well-being
Being a self-employed professional means you don’t have the safety net of a corporate health plan that typically covers various illnesses. If you fall ill, you must pay for the healthcare costs out of pocket, which can be very expensive.
Having health insurance ensures that you have financial protection and access to necessary medical care, allowing you to focus on your business without the burden of unexpected healthcare expenses. It’s a safety net that can safeguard your health and financial well-being.
2. It safeguards your business and assets
There are plenty of calamities that can put a severe dent in your business’s bottom line. For instance, an employee could accidentally spill paint on your merchandise; a customer might be injured by tripping on a rug in your store. Or, you could face a lawsuit for reputational harm caused by something you or your employee said.
General liability insurance ensures financial protection against such unexpected events, offering a safety net for your business’s continued stability and success.
Your business heavily relies on your skills and capacity to work. An injury or sudden illness that disrupts your ability to work effectively could exhaust your savings and leave you grappling with medical bills and other expenses.
Disability insurance protects your income if you cannot work due to injury or illness. Depending on your policy, disability insurance can replace your lost income for a period ranging from a few weeks to your entire working life.
4. It secures your expertise
Entrepreneurs depend on themselves and their team’s expertise. However, mistakes are bound to happen. The professional advice or services you provided may cause a customer financial harm, or you may fail to deliver by a deadline. Such occurrences can lead to expensive legal fees and pose a severe financial burden.
This is where professional liability insurance steps in, offering protection for your small business against claims of errors or mistakes in the professional services you provide to customers or clients. This coverage is a crucial safety net, ensuring your business can navigate potential setbacks with greater financial security.
5. It protects your space
Emergencies come in all shapes and sizes. From power outages and equipment failures to workplace accidents and natural disasters, there is much for a small business to guard against. That’s where a Business Owner’s Policy (BOP) comes into play.
BOP safeguards your workspace, covering repair and replacement costs for damaged or stolen items, including those not owned by you but in your care. It also supports your income and expenses during repairs after covered losses like fires or theft.
6. It shields against digital threats
Cyber attacks can cause substantial disruption and damage to your small business. It can impair your bottom line, as well as your business’ standing and consumer trust.
Cyber insurance protects your online assets and minimizes the impact of cyber-related incidents (breaches, leaks, etc.).
The final word
Regardless of your business stage, every entrepreneur requires a safety net. Insurance brings peace of mind and allows you to face the future with greater confidence and security.
Remember that each business is unique, so tailor your insurance to suit your needs and circumstances. If needed, seek guidance from an insurance expert who can provide invaluable advice to ensure you make well-informed choices.
Want to know more about startups and what it takes to get started? Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, bookkeeping, taxes, HR, payroll, insurance, and recruiting — and we can help yours, too. Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact ushere.
Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.