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Insuring your side hustle

The past year has been so full of bad news, but for some of us, there has been a silver lining:

The side hustle.

If you’ve spent the last year setting up and running a side business, you’re not alone. Plenty of people have lost jobs or had incomes reduced and have turned to a side business to pay the bills, maintain their sanity, or just to give them something to do during quarantine periods.

But what does your side business have to do with me, or with insurance?

When you start a business at home, it often means setting up equipment or storing supplies that you otherwise might not have had on your property. This may be things like machinery, or consumables, or even durable goods. Whatever the case may be, these items represent an insurance risk that needs to be addressed with the correct insurance policy.

What do I mean by that?

What I mean is that businesses operated from home, even small ones, may need a commercial insurance policy in addition to your normal home insurance policies. This will ensure that potential claims resulting from your side business, will still be paid out.

To illustrate this, let’s use the example of someone setting up a woodworking business in their garage. For the business, this person may need an electric saw, some hand tools, some consumables, and input materials (such as the wood itself).

In this example, there are several risks that need to be covered.

The wood represents a fire hazard. If the house were to suffer a fire and the insurer had reason to suspect that the items in the garage were being used for a business, there’s a good chance that the resulting claim would be repudiated if the business wasn’t insured under a commercial policy.

The same logic would apply in the event of a power surge destroying some of the machinery. The claim may again be repudiated because the insurer may insist that the damaged items needed to have been insured under a commercial policy.

Or let’s say that the woodworker hires a casual labourer to assist him/her for the day. There’s an accident and the labourer is seriously injured. If the labourer then sues the woodworker for damages, the woodworker’s normal house cover won’t cover that cost, meaning that any damages awarded to the labourer will be for the woodworker/home owner’s personal account. Whereas business liability cover may have paid out instead.

This is quite a detailed, lengthy topic and one that is difficult to cover in a single newsletter.

If you are running a business from home, no matter what it might be, please speak to me about it. Let’s figure out the risks together. If I can, maybe I’ll even come and check it out in person so that I can give you the best advice.

Remember, I am not here to load you with extra expenses. But I do want to ensure that if something goes wrong, that you’re covered.

If you’re running a business from home and you want to be sure that you won’t face any unexpected shocks with your insurance, please contact me today and I’ll give you the best advice I can for the right cover for your business.

Making sure you are properly covered,

Stephan Kruis

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