As a small business owner, you have a million things to do and worry about. Liability shouldn’t be one of them. But what do you do if your work is sporadic and you’re not 100% sure when the next gig will come? How do you make sure that you’re covered for each job but not wasting money on insurance when you’re off the clock?
The answer is short-term liability insurance. It’s the newer, better, more affordable business insurance many are choosing to protect themselves from risk.
But how does it work and what does it cover? Let’s take a look.
What is short-term liability insurance?
As the name implies, short-term liability insurance provides coverage only when your small business actually needs it. It’s a liability policy that can be purchased for a specific time frame, as opposed to an annual insurance policy. Typically, short-term policies can be purchased by the:
The underlying concept for short-term business insurance is quite simple—don’t pay when you’re not working, and keep more money in your pocket. Short-term liability insurance gives small business owners and independent contractors the flexibility and affordability they need in every aspect of their business.
Although short-term liability insurance is useful for almost any business, it’s especially handy for the following situations:
You work in an industry that’s seasonal — For instance, if you moonlight as a fishing guide in the summers, you’ll want to make sure that you’re not exposed to bodily injury liability every time you take a group out. You’ll want to buy specifically for that season, rather than paying for an entire year.
You work on projects that have a limited duration – For example, if you’re a handyman, you might be called in on short notice to fix something in a client’s house. You work on a project-to-project basis, meaning it’s best for you if you only have to pay for handyman insurance while your job is in motion.
You’re bidding on a project that requires proof of a specific amount of insurance coverage – For instance, if you’re a contractor competing to land a project, you may need to show a Certificate of Insurance to prove that you’re covered. Even if you didn’t already have a policy, with short-term liability insurance, you could purchase a plan to prove that you’ll be insured when the project launches. Having insurance makes you a stronger competitor.
You provide professional advice to clients – For example, you’re starting your own life coaching business. Your job entails that you give advice to your clients, guiding them through the various obstacles of life. While you’re building your client base, your hours may not be consistent. Use short-term professional liability insurance to ensure you’re covered during your sessions. That way, if one of your clients sues you for negligence, claiming your advice caused their financial loss, you’ll be protected from the worst-case scenarios.
What types of short-term liability insurance are available?
There are two main types of business liability insurance: general and professional liability.
General liability coverage – Provides coverage for claims of third-party property damage or bodily injury. This is suited for occupations such as:
- Event planners
- Personal trainers
- Pet sitters
Professional liability coverage – Also known as errors and omissions insurance (E&O), it offers protection against claims of negligence or inadequate work resulting in a client’s financial loss. This is meant for professions that typically offer advice or professional services, such as:
What does short-term liability insurance cover?
Short-term liability insurance can protect your small business from the following:
Bodily injury – For example, if you’re a janitor and forget to put out a wet floor sign when you’re mopping, it could lead to someone tripping and seriously injuring themselves. You could be held liable for bodily injury, which is covered by general liability insurance.
3rd party property damage – For example, as an event planner should you damage the floors when setting up for an event, you could be held liable for reimbursement or replacement. A short-term event liability insurance policy, a form of general liability coverage, could have your back.
Defense costs – Should a client or third party sue you for negligence, bodily injury, personal and advertising injury, or property damage, you could be left to pay for your own legal team. This means you could be liable for all the defense costs. Legal defense for negligence claims is considered professional liability, and things like bodily injury, property damage, and personal and advertising injury are covered by general liability insurance.
Medical bills – For instance, as a martial arts instructor, your students spend a great deal of time punching, kicking, throwing, and engaging in other risky activities. Should a student get an injury which results in medical bills, you could be held responsible.
Errors and omissions – If a client is unhappy with the work you performed, or claims that your services were inadequate, causing them financial loss, they can sue you for professional negligence.
At the end of the day, short-term liability provides the protection that your small business needs to do its work confidently. It’s designed to be accessible to all businesses, no matter how small: no costly minimum premiums, no annual commitment, no two-month initial payment, and no confusing paperwork. It’s insurance made simple.
Pro tip: If you have any staff or contractors who work with you, they are not covered under your liability insurance policy. Instead, subcontractors need to be added as Additional Insureds, and you’ll need a workers’ compensation policy to cover your staff.
What are the benefits of short-term insurance?
Short-term insurance can benefit your business in a number of ways, including:
- On-demand insurance the moment you need it
- Cost-saving opportunities
- Flexible coverage that can be tailored to your schedule
- Confidence in knowing that you’re fully covered
Thimble: short-term insurance when you need it
Even if you’re careful, performing your job without insurance exposes you to far too much liability. When all it takes is one slip and fall to impact your bottom line, it’s simply not worth the risk—especially when you can purchase an affordable, short-term insurance policy the second you need it.
At Thimble, we provide on-demand general liability and professional liability insurance that’s designed for businesses like yours. From hourly, daily, or monthly plans, you can take out a short-term policy for exactly the length of your project.
We believe in insurance that works for small businesses.
You can get a policy with Thimble in less than 60 seconds. Simply download the Thimble app and answer three simple questions about your company to receive your free quote. It only takes a minute to go from being exposed to having proof of insurance on hand. That’s Thimble: insurance made simple.
Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.