By: Edward L. Blais, JD, CIC, CPIA
In today’s economy, having an extra gig, like working for an Uber on weekends or renting out a garage apartment on Airbnb, can be an attractive way to get some extra cash quickly and conveniently.
Most gig workers either sell a service, such as the Uber driver, or rent an asset, like their house. Thanks to mobile phone apps, virtually any service can be offered as a gig, from lawn care and dog walking to graphic design. Data shows that the gig economy has really taken off, especially during the COVID-19 pandemic, with an estimated economic impact of $350 billion in 2021. Currently, over 57 million Americans work in the gig economy.
While gig workers may be drawn in by the promise of fast cash, they may not realize that their regular insurance does not cover many of the liabilities associated with their gig.
If you’re a gig worker, you need to start thinking like a small business owner and consider the kinds of claims you face from customers who allege injury or property damage. In these situations, your own personal insurance policies would not be enough to cover you.
True, some of the apps that you use, such as Uber or Airbnb, may have their own insurance policies, but you need to be aware of the gaps in these policies that could leave you unprotected.
At a minimum, like any other small business owner, you should have general liability insurance, which covers claims regarding injuries to others or damage to their property. Without general liability insurance, you would have to pay any attorney fees and other legal costs out of pocket if a client sues you.
If your gig involves tools, equipment, stock, or office furnishings you should consider adding property insurance to protect your own assets.
If you offer professional services, such as graphic design or legal advice, you should also explore the benefits of professional liability insurance or an errors and omissions policy.
Even if you don’t have employees, worker’s compensation could also benefit you as a self-employed worker, helping to offset the cost of medical bills as well as covering lost wages and other related costs.
While gigs may seem like an easy way to make some more cash, there are hidden costs and risks. Don’t find out the hard way that your existing insurance policies don’t fully cover the liabilities you face in your gig. Call us to assess your needs and we’ll get you the full coverage you deserve.
Source: “The Rise of the Gig Economy” in The Standard, February 4, 2022.