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How to get sole proprietorship insurance in 5 easy steps

Individuals who dream of running their own business often take their first step into entrepreneurship by forming a sole proprietorship. Easy to create and maintain, this type of organizational structure is one of the more popular choices in the United States, but that doesn’t mean you can simply sit back and let it run itself.

Just like any other business venture, opting to become a sole proprietor requires you to take a careful look at the risks involved and protect yourself against a range of potential financial burdens. Most business owners who start a sole proprietorship elect to enroll in insurance coverage that protects their personal assets in the event of a lawsuit.

The type of business you form will determine the insurance policy options that are right for you, as some small business owners may not require much coverage, while others want to protect their business entity as much as possible. Keep reading to learn more about the business insurance policy choices available for sole proprietors and how to enroll in coverage quickly and easily.

What kind of business insurance do I need for my sole proprietorship?

From the most basic to a complex one, every sole proprietorship requires some level of personal liability. Unlike a corporation completely separate from its creators, a sole proprietorship doesn’t distinguish between an individual’s personal and business assets. You may find that one or more of the small business insurance options below will provide the perfect amount of liability coverage that you’re after.

General liability insurance

All sole proprietors work with customers or clients on some level, making it essential to implement some sort of liability policy in the event of an unforeseen situation. While some types of businesses may find their level of risk to be quite low, individuals who provide direct services to the general public can benefit from general liability insurance.

An exciting industry to work in, sole proprietors who offer catering services can sometimes be in a particularly vulnerable position. Imagine you just provided delicious food for a client’s wedding and, a few days later, you receive phone calls from multiple guests demanding that you pay for their medical care, as they ended up developing food poisoning. You’re now looking at several thousands of dollars in unexpected expenses and aren’t sure where the money will come from.

Many entrepreneurs are also keen to the financial challenges that can come from unintentional property damage. You may have recently started an auto detailing business and provide your services at each customer’s home. In the blink of an eye, an accident could result in you scratching or denting the car you’re working on, and your irate client may choose to sue you. Not only are you being asked to pay for the costs associated with repairing their vehicle, but you’ll also need to pay for a defense attorney.

General liability protection is important for every sole proprietor. While it’s a type of coverage applicable in many scenarios, it likely won’t cover issues involving damage to your own property, auto accidents using a business vehicle, or lawsuits involving a professional services mistake.

Workers’ compensation

Budding sole proprietors might instantly assume they don’t need workers’ compensation insurance as they are the only people involved in their business, but that may not always be the case. If your business grows and there just aren’t enough hours in the day to get everything done, you may choose to hire an employee while maintaining your sole proprietorship legal structure.

For some types of businesses, this may be a difficult concept to put into practice, but others, like DJs, may find that hiring help makes perfect sense. Let’s say you’ve landed the gig of your dreams and have a wealth of tasks on your plate before you set foot on stage. If you hire an employee and that individual sustains a bodily injury while on the job, they may sue you for medical costs, lost wages, and ongoing physical therapy.

The idea of enrolling in this type of insurance can seem overwhelming, especially if you’re a new sole proprietor, but many business owners opt to obtain workers’ compensation insurance online. In many cases, you can get the coverage you need in just a few minutes and feel confident that you have all the protection you need for your employees.

Professional liability insurance

When it comes to sole proprietorship, there’s no distinction between business liability and personal liability. Should you run into a situation where a client sues you for a large amount of money, you may end up sacrificing your personal assets to settle the dispute. Even if you think it would never happen to you, enrolling in professional liability insurance is the best way to protect yourself if you run a service-based business.

Also called errors and omissions insurance, this type of protection can help if you offer professional services, rather than goods, to your clients. For example, a health coach can claim that they cannot guarantee their clients will achieve specific results, but that may not stop an upset individual from taking legal action to get their money back. Professional liability insurance can help cover your legal fees in this type of situation and may protect you financially.

Many service-based professionals, including nail technicians, tattoo artists, and more, can benefit from this type of insurance coverage. Remember, customers always have some level of expectation when hiring you, and should anything go wrong while you deliver your services, you’ll appreciate knowing that your assets are protected.

Additional insurance options

Most sole proprietors can benefit from the above-mentioned types of insurance, yet there are even more options to consider depending on your specific situation.
If you own a company vehicle, a commercial auto insurance policy might make sense for you.

Individuals working out of their homes could benefit from commercial property insurance in the event of theft, vandalism, or a fire.

Other sole proprietors enjoy the convenience of a Business Owner’s Policy (BOP) as it bundles multiple types of protection, including business interruption and business property coverage.

How much does sole proprietorship insurance cost?

Insurance companies base small business insurance premiums on several factors, including your industry’s level of risk and your deductibles for each type of coverage. Like any other type of protection, the price you pay for sole proprietorship insurance will be unique to your specific business.

Price shopping for insurance can be time-consuming, and while it’s important to get multiple insurance quotes before you commit, sole proprietors likely just don’t have that kind of bandwidth. Instead, business owners can visit Huckleberry for a free quote that’s straightforward and customized to your specific needs.

Get sole proprietorship insurance in minutes by following these steps

Instead of dealing with multiple insurers, you can make your life easy by visiting Huckleberry today. Simply answer a few questions and get a no-obligation quote without filling out any complicated paperwork. Here’s how:

  1. Head over to Huckleberry.com and click on “Instant Estimate.” It can take as little as 60 seconds to get your free quote.
  2. Select the industry you’re in so Huckleberry can customize a small business insurance quote specifically for your sole proprietorship.
  3. Choose the policies that will work best for you. We’ll only provide quotes for what you want and nothing you don’t.
  4. If your quote looks good, you can continue the checkout process and complete your enrollment. It’s that easy!
  5. Short on time? Try our quick rate estimator to get a ballpark idea of what small business insurance coverage would cost you. You can also check out our workers’ compensation calculator for even more information.

Starting a sole proprietorship is a truly commendable task and offers business owners the flexibility to run their company in the way that best works for them. You’ve no doubt spent countless hours building your client base and fine-tuning your services and products, but in all the hustle and bustle, make sure you enroll in small business insurance as well.

Huckleberry makes it easy for sole proprietors to get the coverage they need at rates that make sense for your bottom line. In just a few minutes, you can get a free quote for insurance and enroll in the protection that helps you to sleep just a little bit easier at night!


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Disclaimer

All content on this page is for general informational purposes only and does not apply to any specific case, is not legal, tax or insurance advice and should not be relied upon. If you have any questions about the situation for your small business or the latest information in your state, you should contact an attorney for legal advice, an insurance agent or broker, and/or your state's labor or industry agency, board, commission or department. Please note that the information provided on this page may change at any time as a result of legislative action, court decisions or rules adopted or amended by any state or the federal government.

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