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.