Do you provide a personal service as an independent business? Whether you’re a tax preparer, a medical provider, a business consultant, or a hairstylist, you are the most valuable asset to your small business. In many ways, this makes the right insurance even more important. But what is the right insurance? Here are five key policies to consider.
1. Commercial Auto
If you go out to clients’ locations to perform services, your vehicles need different coverage than just those used for personal reasons. Standard auto insurance generally excludes coverage during business use.
The amount of risk grows with specialty vehicles. A wedding planner using their own sedan for work risks the cost of replacing it, which may or may not be significant. But a flooring installer who needs a modern, expensive van for their tools and materials could put their entire business in jeopardy if something happens to that van.
2. Health Insurance
Good health insurance is vital for small business owners who do the bulk of the work themselves. You can’t afford to be out sick because your business earns no income. This is why self-employed individuals are encouraged to purchase health insurance by allowing it as a deduction on their taxes.
Health coverage may be available through a variety of means, including state marketplaces offering partial subsidies, your spouse’s employment, trade associations, small business cooperatives, private policies, and even Medicare or Medicaid.
3. Loss of Income
As a service business, you are likely the primary — or only — source of income for the business. And if this is your primary source of personal income, you can’t afford to be out of work. Loss of income insurance works with other forms of insurance to provide comprehensive coverage.
For instance, if your paint truck is destroyed by a tornado, replacing it and your tools is covered by property and auto insurance. But what about the jobs you lose because you have no truck or tools? A loss of income policy could pay for a loaner vehicle or the cost of renting tools so you can keep working for now. The goal is to pay what you need to get you back to work as soon as possible.
4. Professional Liability
Professional liability insurance usually comes up in conversations about doctors, lawyers, accountants, and other professionals. But if you perform any service — such as preparing taxes to styling hair — you could be held liable if someone is unhappy. If you miscalculate a person’s tax return and the IRS audits them, the client has every right to pursue damages for the error.
Some industries use variations of professional liability coverage that is specifically targeted to their needs. For instance, medical providers may need malpractice insurance, which covers medical errors or problems with care plans. Professionals who provide a technical service — such as website designers or app builders — may opt for errors and omissions coverage.
5. Workers’ Compensation
If you employ no other people, you probably think you don’t need workers’ compensation insurance. But you may be contractually obligated to purchase it if contractors you work for require it. They don’t want to risk any liability for their own company if an accident befalls you on their site.
Workers’ compensation may simply be a good idea whether or not you’re forced to buy it. If you get injured on the job, can your business survive your absence? And if you don’t have good health insurance coverage, workers’ compensation can be a good way to bridge the gap by protecting your health while working.
Do you need any of these insurance policies to provide the best protection as a one-person business? If you’re not sure, the best place to begin is by consulting with a business insurance professional. Metropolitan Insurance Service Consultants, Inc, can help. Make an appointment today to assess your needs and goals.