November 2, 2022

Does a One Man Business Need Insurance?

Reasons why One Personal Businesses need Insurance.

Insurances for One Woman Businesses to Consider.

The Risk of being a One Person Run Operation

Are you the sole owner and operator of a small business? Think yourself immune from Insurance requirements? Never realized that you are in fact at risk? All of these are common themes in Single Member owned Entities.

Lots and Lots of Reasons Single Member Owned Operated Entities Require Insurance:

There are lots of reasons to purchase insurance products. Sometimes it involves loss of income, sometimes it is business property protection. However often it is the liability created from the business. You would not visit a doctor that did not have Malpractice Insurance would you? Of course not. Therefore why would you think you can give professional advice or create products that that are not partially backed by insurance? General liablity and professional liablity risk can often be outsized in a single member owner run business. One person that keeps the books is the same person making the sale – but all of these risks lead to the exact same person.

Why Liablity Coverage is Just so Important for Owner Run Businesses:

In the San Francisco bay area is it just so common to have wealthy individuals who start businesses. They start this, inially on the side, thinking what could go wrong. However once they are hit with their first lawsuit they quickly understand the problem. In general home insurance provides no coverage for your small business creation. Not the products you create, not the finished report you printed, not even your high end commercial machines. There is just no coverage.

A Common Insurance Place to Start – for One Person Business:

Many business owners start with General Liablity coverage found in a BOP [Business Owners Policy.] This paired with the Professional Liablity coverage is often a smart place to at least start. No you will not be covered for everything, but there will be some liability protection.

A Second Set of Insurance Policies to Consider:

While it does Not always make sense to wait to purchase these other policies, it sometimes does. These policies can include: Business Auto, Commercial Umbrella, EPLI, Cyber, and so many more.

Some insureds believe it can make sense to start small and add coverages as their business and revenue grow. If you cannot afford the insurance, perhaps purchasing it might not make the most sense.

The One Insurance Policy you Must Buy:

Once you hire your first employee, state law dependent, generally you will need Workers Comp. We will not go into what workers comp is and is not, but its required by the State of California in many instances. Often single person shops would not purchase a workers comp policy, unless required by state law.

Insurance Options for a One Person Business:

Start Ups and One Person Businesses need insurance, just like everybody else. The challenge is that many of these outfits just do not know it. For many businesses the insurance coverages can be quite affordable and simple to get. Of course that is not the case for all outfits.

Reach out to a Licensed Insurance Agent in your jurisdiction to learn more.