BizInsure Claims That Side Hustles Are Exposing Americans To Unforeseen Risks

November 17 14:39 2022

–  More Americans than ever are taking up side hustles to deal with the rising cost of living

–  While it can help earn extra income, Americans may be exposing themselves to unforeseen risk due to a lack of understanding that side hustles carry risk

–  Small business expert Pavel Yurkov urges businesses owners with side hustles to consider their risk profile and protect against adverse situations

A record number of Americans are working two jobs, according to the Bureau of Labor Statistics, as inflation ramps up cost of living pressures. 

While working a side hustle can provide people with additional income to save and pay for living expenses, some may be exposing themselves to unforeseen risk. 

“A side hustle is a great way to get some extra cash, learn new skills and potentially launch a full-time small business – but you need to be careful,” says small business insurance expert Pavel Yurkov, VP of Technology and Operations at online service BizInsure

“Just like any other small business, it’s important to consider your risk exposure and how you can get protected in case something goes wrong.” 

American hustle 

According to Google Trends, the term “side hustle” has been on the fingertips of Americans for a few years now. 

Picking up in October 2020 when US food insecurity peaked during the Covid-19 pandemic, side hustle has steadily grown to become an integral part of the public lexicon. 

Interest in the term ‘Side Hustle’ over time by Google search

By 2022, 45% of Americans have a side hustle, with the average side hustler working an average of 13 hours per week on top of their primary job.

From starting up a handyman or personal training business to selling crafts on Etsy, there are many different ways people are generating extra income. 

“No matter what you are doing, it’s important that you understand your risk profile,” says Yurkov. “Some risks you can mitigate yourself, while others you may need insurance.” 

A dangerous precedent 

While understanding your risks may seem simple enough, past research suggests there is a lack of understanding about getting covered for insurable risk. 

A 2018 poll found 54% of millennials with a side hustle didn’t have insurance. The same survey found 40% said that getting additional coverage never occurred to them. 

Another poll coming out in the same year found that only 28% of respondents have a Business Owner’s Policy (bundle of General Liability insurance and Commercial Property insurance). 

Given the recent rise in side hustle businesses opening, the trend towards a lack of knowledge and concern about business insurance could be all the more dangerous for unwitting side hustlers. 

“Many businesses across the country are underinsured or not even insured at all,” says Yurkov.  “A claim brought against your business could lead to situations that could financially cripple you, leading to bankruptcy and even damage your reputation.” 

Key tips for side hustlers 

While the situation may seem dire, it’s easier than ever for Americans to sort out insurance for their side hustle businesses. 

General Liability* is a common type of business insurance. Also referred to as Business Liability, this insurance can protect businesses against bodily injury or property damage lawsuits from outside parties.

Whether an accident is a business fault or not, or the accusation is true or meritless, General Liability coverage may help protect businesses against covered claims by paying defense costs and damages up to the chosen policy limit. 

Another important type of insurance for side hustlers is Professional Liability insurance*, especially if the business involves giving advice. 

It is designed to protect businesses against claims of negligence, misrepresentation or mistakes, as well as document or paperwork errors – mistakes that nearly anyone can make. 

“It’s important for people to remember that your side hustle is a business, and you could be liable to deal with the consequences as the business owner,” says Yurkov. 

“Fortunately, it’s really easy for SMEs to get protected by a whole range of business insurance products online. You can compare quotes from leading insurers and get coverage instantly, so you can keep bringing in that extra income.” 

*As with any insurance, coverage will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice. The number of quotes provided varies between products, occupations and other underwriting factors determined by the insurers.

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