Preparing for the Self-employment Boom
The past two years have motivated many employees to make a serious life change — they want to be their own boss, and they want to do it from home. Those who previously rented an office space are moving their operations home to save money, and those with a hobby or part-time side hustle see an opportunity to take a leap of faith and start a new venture from home. As the self-employment market grows, so does the opportunity to make sure adequate insurance coverage is in place.
There are more than 150 million workers in the U.S., and 16 million identify as self-employed (Pew Research). In May 2021, that number increased by 351,000. Americans filed paperwork to start 4.3 million businesses in 2020, a 24% increase from the year before. This reversed a 40-year decline in entrepreneurship. In 1980, 12% were self-employed; by 2018 it was only 8%. By July 2020, the share of workers reporting they were self-employed hit an eight-year high.
Many of the new ventures we’re seeing are online, which could have been driven by the layoffs that left millions out of work early in the pandemic. According to Venture Forward, Americans created 2.8 million more online microbusinesses in 2020 than in 2019, and about 90% of these employ fewer than 10 people. Thirty-nine percent of these businesses are a supplemental source of income, and 67% would like their microbusinesses to become a full-time job (Brookings Institute).
Because of social media platforms like Instagram and TikTok and e-commerce platforms like Etsy, it’s easier than ever for crafters and artisans to promote and sell their products online. According to Etsy CEO Josh Silverman, “anyone with creativity and 20 cents can open a shop on Etsy.”
Some may not recognize the significance of properly insuring their in-home business. The below claim examples help illustrate the importance of having coverage in place:
You operate a small business on eBay and have an inventory of $7,500. A fire in your home destroys or damages your inventory. A Home Based Business policy will provide coverage up to your business personal property limit.
A customer visiting your home for business slips and falls. Since the customer was at your home for business purposes, a Home Based Business policy will provide the needed liability coverage excluded under your homeowners policy.
Your laptop is stolen while you are visiting a customer. A Home Based Business policy provides up to $15,000 to replace your laptop or any business personal property while away from the residence.
Obtaining a Home Based Business policy can be an inexpensive solution that provides these smaller business exposures with the coverage they need. In a market growing considerably, you can provide liability limits up to $1 million and business personal property coverage up to $100,000. Including additional coverages like equipment breakdown, host liquor liability and loss of business income is more important now than ever before. USLI can be the perfect solution for this exposure type.
Want to learn more? Check out our recent Self-employment Boom webinar highlighting the need for coverage in this industry.
Please contact your Personal Lines underwriter today to obtain a quote or to learn more about our Home Based Business product.
As always, thank you for your support and business.
Contact Matt McShane
Second Vice President, Senior Underwriter | 888-523-5545, ext. 2142
Written by Cory Bennett
June 2, 2022