You’re a mom. And an entrepreneur. Before we go on, are you okay? Seriously, have you lost your mind?!
Maybe you enjoy running on no sleep. If you can manage small humans, you can surely manage an entire business operation, right? Right!
Because you are a mom, you have superhuman strength. You’ve got laser focus. And you’re not afraid to get your hands dirty. (No… not what you’re thinking. I think everyone is afraid to get their hands that kind of dirty.)
You got through childbirth, and nothing could be more painful or drawn out than that… right?! Well, I guess that depends on your pain tolerance. Working as an entrepreneur can be extremely taxing mentally, physically, and emotionally. You have highs, lows, and many feelings in between.
This probably goes without saying, but entrepreneurs handle massive amounts of responsibility. And what follows responsibility? Liability. That’s why they both end in -bility. (Just a hunch.)
So, what’s your point?
Here’s the point: if you have liabilities, you should do your best to manage them. Minimize your risk.
You babyproof your house, right? Let’s hope so! You want your baby to stay safe, happy, and healthy. You don’t want anything bad to happen to your little precious babe, and because of that, you cover your bases.
You should have the same mentality when it comes to running your business. In order to ensure it runs smoothly, you need to figure out the best way to protect your operations. And a great place to start is business insurance.
Business insurance for mompreneurs
Whether you’re making organic lotions and potions out of your kitchen or have a large yoga operation, you need protection. If you are accepting payment for your goods or services, you are 100% a business. Which means you should 100% protect it.
I have no idea where to begin. Help!
Every business is unique, so coverage recommendations can vary based on your line of work.
Aspects that affect risk include:
- Interacting with the public
- Your industry
- The type of building you work in
- Your business assets
- Whether or not you’ve had insurance claims in the past
- Where you work
- How many employees you have (including part-time, full-time, contractors, and subcontractors)
Liability insurance for mompreneurs
Generally, liability insurance is the best place to start. Liability is simply a longer word for “risk”. Three popular liability policies include general liability, professional liability, and cyber liability.
Mom entrepreneur general liability
General liability insurance provides a nice blanket of coverage for many of the random things that can go wrong — in business, not life. So, if baby Charlie starts teething on big sister Emma’s hand a little too hard, general liability would be of no help. However, a bag of frozen peas might be.
This coverage would help, however, if you accidentally damage a client’s property, like a smartphone or a tablet. Bodily injury is also covered under this policy. So, if you work from an office and someone trips over a stack of loose papers, or work from home and a client trips on a mini skateboard, you’re protected.
Non-physical risks are also covered with general liability. You’ll be protected against claims involving slander, libel, false advertising, and copyright infringement.
What happens if a client files a lawsuit?
Lawyer’s fees, damages, losses, and miscellaneous court costs are covered in most insurance policies (not just liability policies).
Professional liability insurance
Professional liability isn’t for every operation, but it’s recommended if you provide expert advice or services.*
*For a living, not for when you’re caught on the phone with your sister for 45 minutes advising her on how to avoid a chatty neighbor.
Also known as errors & omissions, or e&o insurance, this policy protects you in the event that a client claims you failed to deliver a promised service, were negligent, or simply made a professional mistake. Simply put, professional liability protects you against a dissatisfied client. It’s an important type of coverage for people like designers, consultants or photographers.
Let’s say you’re a marketing consultant. You advise a client to make a move, and it ends up being the wrong move. The client is suffering from a financial loss and may blame you. Or even worse, they may file a lawsuit against you.
Paying the damages yourself would seriously hurt your personal pocket, and maybe even Emma’s future college fund. But with professional liability, you’d be protected.
Let’s make one thing clear
No one likes bills. Big bills, or small bills. They’re all bills, and they’re all annoying. The great thing about insurance coverage is that if something happens, the insurance company pays these very expensive bills for very crappy situations. Not you.
Do mompreneurs need cyber liability insurance?
Cyber liability sounds like a big deal. Like it’s this big, complicated thing for big, complicated operations. Well, it’s not just for large companies. In fact, hackers are statistically more likely to go after smaller organizations, because they don’t have the same security in place compared with large operations.
You don’t have to be in IT to face cyber liabilities. If you handle any sensitive customer information, even something as simple as credit card information, you should consider this policy. It doesn’t matter if you sell homemade organic dog treats for $12, or high-end custom jewelry for $2,000. Hackers don’t discriminate.
Cyber liability has an assortment of benefits, but here are a few:
- Customer notification
- Forensics investigation
- Cyber extortion
- Regulatory fines and legal costs
- Identity theft
- Credit monitoring
- Reputation management
- Third-party services
- Equipment for business interruption
How to protect your business property
This one’s easy. Business property insurance protects your business property. All kinds of commercial property can be covered with this policy — anywhere from computers to smartphones, inventory, and even an office building.
If your gear gets damaged due to theft, natural disaster, vandalism, fire, or what have you, this policy will help cover losses. And you can customize the policy to pay for losses based on the replacement cost or actual cash value.
Food for thought on home-based businesses
48% of home-based businesses rely on their homeowners or renters insurance to cover their business items.
Unless these businesses are working with a laptop from 1999, they’re pretty much out of luck, because homeowners policies typically only cover up to $500 in business property damages. That’s why it’s very important to protect your commercial property with the right kind of insurance. (In this case, that’s business property insurance.)
Learn more about why home-based businesses need more than homeowners insurance.
What if my work property leaves my business premises?
Business property coverage ends after you’re 500 feet away from your work premises. If you’re bringing your work equipment, inventory, or tools off site, check out inland marine insurance. It protects commercial property in transit.
Do mompreneurs need workers’ compensation?
If you have employees, it’s a no-brainer, and it’s even legally required most of the time. But you should consider workers’ comp even if you don’t have employees.
When you think of workers’ comp, often you think of contractors. Especially if you work from a desk, not a rooftop! So why on earth would workers’ compensation insurance be a fit for you?
To start with, it helps cover expenses involving an employee’s job-related illness or injury. This can also apply to yourself.
Just because you’re not operating a jackhammer, doesn’t mean there’s zero risk of a work-related injury. Let’s say you make a living by creating stuffed animals with textiles dyed from fruit. You might sew your hands together. That’s a little dramatic, but there are all kinds of things that could happen, like developing carpal tunnel.
Workers’ comp becomes more important for event planners and other types of professions that are more physical.
Business auto insurance
Alright, moms, listen up! If your company owns a vehicle, you need business auto insurance. Why? Because if you get in a fender bender making deliveries for your floral company, your personal auto policy typically will not cover the damages.
Hired & non-owned auto insurance
If your flower business has employees delivering bouquets in their personal vehicles, this policy protects them (and you) in the event of an incident. The coverage also extends to vehicles you rent, hire, or borrow on behalf of Stems ’n’ Gems.
Learn more about hired & non-owned auto insurance.
Do mom business owners need umbrella insurance?
Insurance policies have caps on how much they will cover if something bad happens. Umbrella insurance is also known as excess liability insurance. This coverage boosts the limits of your existing policies.
If there are potential risks that your company may face that are outside of the typical limits, you can add an umbrella. For example, you live in Colorado. It’s very snowy and icy, but the local market is depending on your 8:00 am artisan bread delivery.
You hit an ice patch and have a terrible accident. Your business auto policy covers up to $500,000 in damages, but the costs of your accident totaled in $750,000. With umbrella insurance, the additional $150,000 would be taken care of. Otherwise, your personal bank account would have to pay the difference.
So, what now?
Now that you have more of an understanding as to what business insurance policies might be a fit for your mompreneurial endeavors, you’re ready to get an online business insurance quote.
With one simple quote form, we compare over 30 insurance companies to get you the best coverage at the lowest price — including liability, property, workers’ compensation, and more. Our experts work for you, not a commission. All quotes and advice are free.