Self Employed Liability Insurance - What You Need To Know To Keep Your Business Safe

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With thousands laid off during our recent economic downturn

, many people have become self-employed. What they may not know is how important it is to have self employed liability insurance in order to protect their business investment and future earning ability. Expensive as it is to start your own business, insurance is no place to skimp. Here's why. You can be sued for any number of things ranging from an accident with your business vehicle to a malpractice suit from an unhappy client. Your personal liability insurance will not protect you from lawsuits that arise from your professional practice.

So what determines the type of coverage you need when you're considering self employed liability insurance? There are policies available that are designed for specific professions, like doctors, lawyers, etc. So coverage type and cost will depend on factors like the type of business you operate, the level of risk your business generates, and whether you do, or do not, have employees. For example, if you are remodeling contractor, drive a business vehicle, and have two helpers working for you, you'd may need to consider professional indemnity insurance, employer's liability insurance, public liability insurance, legal expenses insurance and product liability insurance. There's actually a single insurance product that can meet all of these needs, called an "All Risks" policy.

It may also matter to a potential insurer if your business is structured as a sole proprietorship, limited liability corporation, corporation, etc. So be prepared to consider changing your business structure in order to get better rates and better self-employed liability insurance. Changes in your business structure may also reduce your personal liability and/or provide tax advantages. You should always consult with a legal professional and/or a tax advisor prior to making business structure changes to determine the advantages.

To get started in your search for self employed liability insurance you should make a list of the following information. What kind of business do you own? Do you offer a physical service, manufacture something or consult? Do you work alone, or do you have employees and how many? How is your business structured legally? Approximately how much money have you invested? Explore your business in detail with several insurers. Discuss areas where you might be vulnerable to losses. Then get quotes on rates, the details on their coverage and compare them. Be sure that they cover your legal costs, medical fees, property damage costs and that 24-hour protection is provided.

by: Troy Truman

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