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5 Side Hustles That Need Liability Coverage

Maureen Brogie

Maureen Brogie

Senior Advisor at InsuranceBee
Maureen Brogie is a senior advisor at InsuranceBee, a provider of small business insurance. Maureen holds a BS in Finance and is a licensed property and casualty agent in 40 states. Following a career break to raise her twin daughters, Maureen joined InsuranceBee in 2011 and now heads up a busy team of client advisors.
Maureen Brogie

Millennials are leading the charge when it comes to the side hustle. More than half of U.S. millennials are making extra cash operating a side hustle, while a recent study from Bentley University revealed that 66 percent of millennials have a desire to start their own business.

Starting off with a side hustle while still maintaining a full-time job can be a great way to build up a business while not having to give up the security that comes with regular income.

But, do you think that side hustles are totally risk-free? Think again. Here are five popular side hustles that need liability insurance, with examples that demonstrate why it’s so important.

Social media manager

Entrepreneurs have recognized the importance of social media marketing, but few have time to do it well. This is where side hustlers come in, perhaps providing a few hours per week to help business owners schedule some Tweets, or deliver a social media strategy.

While this seems risk-free, there are plenty of pitfalls. For example:

Josh schedules social media posts for his client, a boutique fashion retailer, every week. Distracted by the phone, and with a few different accounts to manage, he forgets to check that he is logged in to the correct account, and ends up accidentally publishing the scheduled posts to another client’s social media account. He doesn’t realize his mistake until a few days later when the client asks him why none of their posts are live.

To make things worse, the client was running a promotion at the time, which all of their followers have now missed out on. The client attempts to sue Josh for the error, which they say has damaged their reputation and resulted in lost revenue.

Errors and Omissions insurance, also known as E&O insurance or professional liability insurance, is recommended for any side hustle that provides a professional service. This type of liability insurance could protect you when an honest mistake is made.



Designer

Many startups cannot afford to employ a full-time designer, which presents a great opportunity for side hustlers with creative flair and an eye for detail. Consider the following example:

Maria has been supplied with some amazing images by her client that they want to use in an online ad campaign. She designs a whole range of marketing collateral, which the client loves.

The campaign launches, but soon after, the client is served with a lawsuit for copyright infringement. None of the images were owned by them, nor did they have permission to use them. Now the client is trying to pin the blame on Maria, even though she had no idea the images they provided her belonged to someone else!

This is another instance when Errors and Omissions insurance can help with advice and legal fees. It comes to your defense if you are accused of doing something wrong, even if the claims are baseless.

Landscaper

For those who love spending time outdoors, landscaping is a fantastic side hustle. Plus, it can be a great way for those with the right tools to rake in some extra cash. How much can go wrong when pulling weeds or mowing a lawn, right?

Wrong!

Becky spends her weekends doing what she loves: planting flowers, pruning shrubs and keeping lawns in top condition. And best of all? She’s getting paid for it! A homeowner has just moved in to a large property in the neighborhood, and wants some help tackling the garden, which has become a jungle while they have been busy fixing up the house.

After hours of cutting back bushes and pulling weeds, it’s time to tackle the unruly lawn. In the long grass, Becky doesn’t spot a huge rock, which is whipped into the air by the lawnmower, smashing straight through the glass in the customer’s brand new french doors. The customer wants to make a claim for the broken doors but as Becky is without insurance, Becky will need to pay out of her own pocket.

Accidents happen. General liability insurance protects businesses from damage to third party property. It also helps source replacements for damaged items, and eliminates the stress of having to resolve the issue all by yourself.

Handyman

A handyman provides an affordable option for people who don’t have the time, or the skills, to get odd jobs completed, and is the perfect side hustle for competent DIY enthusiasts.

Picture the following scenario:

Noah has been asked to decorate a bedroom for a customer. He turns his back for just a second, but it’s enough time for the customer’s dog to get into the room and brush up against the freshly painted walls before going on its merry way to shake paint all over every other room of the house.

The customer assured Noah that the dog would be kept out of the way while he was working, but they’re now holding him accountable for cleaning the house, and their mucky pooch.

If your side hustle is based on another person’s property, or if a third party comes to your place of work, then you need general liability insurance. General liability insurance protects businesses from damage to third party property. It also helps source replacements for damaged items, and eliminates the stress of having to resolve the issue all by yourself. Equally, if there is any dispute over how the damage occurred, insurance could help fight in your corner.


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Business consultant

Utilizing your expertise to advise business owners can be a lucrative way to make money, but what if you get it wrong? For example:

Ahmed has a wealth of experience in helping small businesses grow. An online company asks him to look over their finances for the last few years, as they are hoping to open a physical store nearby. Some of the documents included in the files they send are invoices that include their customers’ account details.

Unfortunately, when Ahmed downloads the files, he doesn’t realize that his PC is infected with Malware, and the confidential data is stolen. Months later, the online company discovers it was subject to a data breach, and has been issued with a fine. Now they’re accusing Ahmed of being responsible.

Cyber liability insurance can’t prevent a cyberattack, but it will help to protect a business if a data breach does occur. Sole proprietors and startups are easy targets for cybercriminals, as they are less likely to have robust security measures in place, but this doesn’t make their data less valuable. A cyber insurance policy offers advice and provides the financial help your business needs to recover from a breach.

Side hustle with confidence

While a side hustle may be seen as a risk-free venture, this type of work is far from it. Liability insurance isn’t just about protecting your side hustle and its income; if a disgruntled client decides to sue and you can’t afford the legal fees, you stand to lose much, much more.

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