According to Finder a huge 43% of the UK population currently make extra income from a side hustle in 2024 – earning £900 on top of their salary a month on average. But what happens if something goes wrong? Unlike business insurance, side hustles don’t legally need cover, but investing in insurance can be a lifesaver in times of crisis.
With this in mind, James Barwell – Insurance Director at Bionic – has created a guide on what insurance types people with side hustles should think about taking out to protect their business.
James Barwell: “A common misconception is that home or renters insurance will cover side hustle activities. Unfortunately, most standard policies exclude business-related activities. This means if you’re running a home-based bakery or a nail salon from your dining room, you’re likely not covered for business-related losses or liabilities.
Why is securing insurance for your side hustle a good idea?
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Protection against liability – Think of liability insurance as a safety net for your side hustle. Imagine you’re a freelance photographer and, during a shoot, someone trips over your equipment and breaks their arm. Without liability insurance, you could be held personally responsible for legal fees and any potential medical costs.
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Asset protection – Many side hustle involve costly assets. Insurance helps protect these goods against risks like theft, fire or accidental damage so you’re not left scrambling to replace essential items at personal expense.
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Professional credibility – Clients and customers often feel more secure working with someone who has insurance, as it demonstrates a professional commitment to quality and responsibility. If you’re a freelance consultant, you may want to consider professional indemnity insurance to reassure clients that they’re covered if any advice leads to financial loss.
How do you know if your side hustle needs insurance?
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Assess your side hustle – Are you providing a service, selling products or even hosting an event? Each type of activity and set of equipment comes with its own set of risks. For example, if you’re selling homemade candles, product liability insurance can be invaluable in case someone claims your product caused damage. Insurance can cover repairs or replacements if your equipment is stolen or damaged, ensuring you can keep your business running smoothly.
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Interaction with the public – If you interact with the public, public liability insurance will cover claims for injury or property damage that might occur during your business operations.
- If you use tools or other equipment – Consider what equipment is crucial for your operations. Insurance can cover repairs or replacements if your equipment is stolen or damaged, ensuring you can keep your business running smoothly
What insurance do I need for my side hustle?
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Professional indemnity insurance – is essential if your side hustle involves providing advice or professional services. This insurance covers you against claims of negligence, mistakes or omissions that could lead to a client suffering financial loss. Side Hustles that should have this cover include freelance financial consultants, graphic designers, web developers and content creators creating content for clients
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Public liability insurance – is crucial if your side hustle involves interacting with the public, clients or customers in person to protect you from claims related to injury or property damage caused by your business activities. Side Hustles that should have this cover include personal trainers, photographers shooting on location and event planners
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Product liability insurance – is vital if your side hustle involves selling products. This insurance protects you against claims that your product has caused injury, illness or damage to property. Side Hustles that should have this cover include creating and selling homemade goods, caterer providing food items and homemade beauty product seller
- Cyber Insurance – is essential if you store sensitive customer data or your side hustle relies on online operations. This type of insurance helps protect your business from the financial fallout of cyberattacks, data breaches and other digital threats. Side Hustles that should have this cover include freelance digital marketers, e-commerce shop owners and freelance social media managers.”
You can find the full guide at the following link : https://bionic.co.uk/business-insurance/guides/do-you-need-insurance-for-your-side-hustle/