Is your side hustle insured?

 

You take your side hustle seriously — so make sure you're insurance-legit!

 

According to BrandMapp, some 43% of South African households with a monthly income of over R10,000 have a secondary income — and for 30% of those, that comes in the form of 'side hustles'.

 

While your side hustle isn't your primary source of income, it's no less serious if you're earning money from it, so your approach to running it like a business also needs to be serious. The company that employs you in your day job has all kinds of insurance to cover everything from the CEO disappearing to your clumsy cubicle mate falling down the stairs, and a full delivery truck going missing. No matter the size of your business, one of the most important things to add to your insurance portfolio is the right liability cover. And, of course, you want to compare Business Insurance deals to get the best one!

 

Size Doesn't Matter

 

The size of your side hustle or how much time you spend working at it has no bearing on the size of a potential claim. Your clients don't care that you're a part-time operator when they're paying full-time price tags. It takes one incident, one error or one omission to result in a claim that could bankrupt your business and jeopardise that key additional income stream — and your reputation.

 

Make it a business

 

To protect yourself and your business, first, make it a legitimate business. Register the business with the CIPC, set up a separate bank account and register with Sars. Having a separate business protects you from personal liability; if a customer sues you, you can lose the business but keep your house.

 

You'll also need Business Insurance because accidents happen, and having a financial safety net in place for these times is crucial. The important thing to remember is that as your business grows, your cover will need to change, so make sure that any new business activities that you pursue are declared to your insurers. If your business has activities that are not the norm for that business type, make sure you declare these to ensure that you're covered for them.

 

Business Insurance & Liability Insurance

 

Business Insurance can cover a range of things: assets like your car, theft (including theft by employees) and from loss in revenue if the business had to grind to a halt. Liability policies cover businesses against claims from third parties for injury, damage to their property or financial losses due to any wrongdoing by the business, your employees or anyone else on behalf of the business.

 

As a recent rise in liability claims (and personal injury claims in particular) shows, South Africans are increasingly likely to seek legal recourse against businesses for any losses they suffer, even if the claim is a shot in the dark in the hope of a big pay day. Litigation can become extremely costly and cripple a business; lawyers and advocates drive nice cars for a reason. Speaking of which, liability policies also offer legal defence costs in defending legal action, subject to the terms and conditions of each policy.

 

What insurance do you need for your small business?

 

There are several different Liability Insurance products to cover your business for different exposures. Stick with us, this is important!

 

A Public Liability cover, under your Business Insurance policy, is designed to cover businesses such as plumbers, electricians, contractors and beauty salons. The policy covers claims from third parties for injury, death or damage to their property occurring at the business address, or for any work done away from the business address. A handyman is a great example here, because all their services are performed at clients' premises, and the work can cause extensive bodily injury or property damage.

 

Additionally, Public Liability cover may be extended to cover products and or defective workmanship, think again of the handyman example, where you install products that could fail and cause damage to a client's home.

 

Professional Indemnity cover aims to protect people such as bookkeepers, actuaries, engineers, draughtspeople and attorneys against claims from third parties for financial losses due to professional negligence. If you have an off day and make a mistake, it shouldn't cost you your business. This kind of cover also includes cover for the fee recovery of outstanding invoices for services rendered to your clients.

 

Getting the right liability cover in place for your side hustle business is a smart move, maybe even smarter than your business idea because it'll keep the wolves from the door if the worst happens.

 

You can compare different kinds of Business Insurance and find the right one for your side hustle at Hippo.co.za.

 

This article is for informational purposes only and should not be construed as financial, legal or medical advice.