Looking to Moonlight? Call Your Insurance Agent First

 By Catherine Powell

Whether you’re fully invested in the gig economy or are just looking to pick up a little folding green by moonlighting, there are a few things you need to know before you get started.  That’s because whether you are thinking of getting into ridesharing, becoming a delivery driver, or even using Airbnb to rent out your home or just a room, there are some liabilities that aren’t covered by your auto or homeowner’s policy.  Even if you’re thinking about making and selling jewelry or some other craft online, don’t assume that your existing insurance is going to cover your endeavors.  Should someone be injured by one of your products or your wares get stolen or burned up in a fire, you’ll soon come to find that all your hard work has gone up in smoke.  Below are some words to the wise about what you need to know to protect you and your sideline business.

Maybe You Can Drive My Car

Whether you’re looking to turn your car into a taxicab or a delivery van, you should know that your existing auto insurance policy isn’t going to apply.  Don’t find out the hard way that your current insurance doesn’t cover you if you’re using your vehicle for a commercial enterprise.  If you should be involved in an accident while using your private vehicle while either ferrying paying passengers or delivering food or goods, your insurer will inform you that neither of these uses is covered on your policy.  Not only will you be on your own to pay for damages to your vehicle and the goods you were transporting, but you could be liable for injuries to any passengers or other persons injured in the accident.  That’s the bad news.  The good news is that there are insurance riders and rideshare policies designed to help cover you should you desire to be a delivery or rideshare driver. 

Don’t rideshare companies provide their drivers with added insurance coverage?

While many rideshare companies do offer their drivers some protection when passengers are present in their vehicles, they provide little else.  That means if you are involved in an accident while driving between pickups or while waiting for a fare, you could find yourself on the hook for damages.  Not to mention that the added coverage offered is generally limited to the injuries and property of others.  It usually doesn’t extend to you or your vehicle.  The amount of coverage is also limited by the rideshare company to which you are engaged, which may or may not be enough to cover you fully.

There are two kinds of riders available to rideshare drivers:

1.      A Basic Rideshare Endorsement is designed to enhance the protection you receive from the company that employs you as a driver. Some insurance companies even bundle in COVID coverage that kicks in whenever a driver is tasked with delivering food, medicine, or other essentials at the behest of a delivery company. 

2.      An Advanced Rideshare Endorsement includes basic coverage plus it adds additional coverage that kicks in while you are either waiting for or en route to a fare. It may also provide loss of income coverage while your vehicle is in the shop being repaired after an accident. 

While the burgeoning rideshare industry has created a need for rideshare policies, they aren’t available everywhere.  If after speaking to your insurance agent, you find that neither is available in your area, the alternative is to purchase a commercial policy to allow you to participate in ridesharing.

Home Sweet Home?

Not necessarily if you plan on renting it out to strangers.  While Airbnb provides what they call Host Protection Insurance, there are limitations:

1.      Any damage caused by a tenant must be reported within 14 days.

2.      You won’t be reimbursed unless you first try to resolve the matter with the guest.

3.      If the damage is caused before or after the booking, you aren’t covered even if it’s caused while the guest is heading to or from the property.

4.      Your personal property isn’t covered.

5.      If you subsequently try to file a claim on your homeowner’s policy, not only can the claim be denied but the policy could be canceled.

Since most homeowner’s policies exclude short-term rentals and business insurance can be costly, what can you do to find an affordable solution?  Some insurers can provide short-term rental coverage in addition to your current homeowner’s policy.

Made in the USA

If you’re looking to turn your hobby into a part or full-time business that you can run from your home, there are a few things you need to understand.  First and foremost is the fact that homeowner’s insurance won’t cover your business, even if it’s only a part-time craft store where you make things at home that you sell online.  If a customer were to be injured by your product or slipped and fell when they came to your home to take delivery, you could be in for a world of hurt if they sued you.  If your products were stolen or burned up in a fire, you would also have difficulty making a claim.  In both cases, your insurer could claim that you were never insured to run a business from your home.

The solution is to speak to your insurance agent about getting a studio coverage rider added to your existing policy.  If that isn’t available, some insurance companies offer a craftsman’s policy specifically tailored to protect small craft businesses that are run out of a home.  Another option is a Small Office Home Office or SOHO policy that covers small home-based businesses.  If your business requires more protection than any of the policies above, you can always look into getting a Business Owner’s Policy otherwise known as a BOP that includes commercial property coverage, general liability protection, and business income protection all in one package. 

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com/