February 15, 2021

When You’re Your Own Business, Is Personal Liability Insurance Enough?

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The freedom that comes with only answering to yourself and your customers can be worth the costs of running your own business. You can work when you want and live your dreams. Doing things your way can give you the results you demand.

However, owning your business isn’t void of risk. Depending on your industry, your liabilities might be as few as you personally or include other items like your vehicle. To guard your business as well as your assets, you need to make sure that you’re protected by the proper liability insurance. An unforeseen incident could happen while you’re working. Your business could be held responsible for a bad turn of events.

Personal liability insurance is only one level of protection. This type of insurance may not be enough to cover all of your liabilities. You need business insurance.  If you assess all of your risk factors, then you can purchase a sufficient amount of insurance for your business’s operations.

Despite that, you might need to prove you’re covered. Your customers probably don’t want to be held liable if you perform negligently. If you’re a painter, a homeowner might not want you on their property if you’re not insured against injury. Certificates of insurance are issued by an agent or broker. They state the policyholder is insured against certain actions to certain degrees of security. 

Why Do I Need a Personal Certificate of Liability Insurance?

What is a certificate of liability insurance and how important is it?

Firstly, a personal certificate of liability insurance doesn’t exist in the way one would think. There is no such thing as a personal certificate of liability. A personal liability policy will not cover business-related injuries or damages. Only a business insurance policy can cover those areas.

Instead of a non-existent personal certificate of liability insurance, you need a certificate of insurance to prove liability coverage for your self-employed business. There are almost no businesses that won’t have to deal with a certificate of liability insurance. For example, Uber drivers need certificates of insurance to defend Uber from the risks they incur while driving.

A certificate of insurance is one of the most common pieces of insurance paperwork across the United States. They are requested, delivered, and reviewed every day. These certificates certify that the named insured carries the coverage at the date of issuance.

How Do I Get a Personal Certificate of Liability Insurance?

Now that you know that a personal certificate of liability insurance doesn’t exist, you can continue your search for the actual form you need.

Knowing how to get a certificate of liability insurance is relatively easy. If you contact your insurance agent, then they should be able to assist you. Some insurance companies offer forms that allow you to request certificates without having to visit an office or make a phone call. There should be no certificate of liability insurance cost as they are typically created when they are issued.

If you want to know how to get insurance certificate online instructions, then you should know that it isn’t recommended to create the document yourself. A blank certificate of insurance PDF should be used by insurance agents, not the common person.

You might be able to download and print your certificate of insurance online from your insurance company’s website. However, a certificate of insurance for business is a legal document. If you forge your own, you’re opening yourself up to a different type of risk. Additionally, an insurance professional knows what information belongs on an official certificate.

What Happens If I Don’t Have a Personal Certificate of Liability Insurance?

If you are researching how to get personal certificate of liability insurance, then you’re limiting your chances of obtaining what you really need. You should instead learn how to get a certificate of insurance.

If you don’t have a certificate of liability insurance for your small business (or any other type of business):

    • Customers/clients might not hire you: You would be reducing your potential customer base if you forego coverage or don’t provide proof of insurance.
  • Your personal assets might be at risk if you’re sued for damages: If you don’t have a certificate of insurance (or coverage) and you are held liable for any injuries you committed on a job, then you can be sued. Litigation damages can destroy your assets.
  • You might not be compliant with your state’s regulations: Certificate of insurance requirements vary by state. A certificate that was issued by your insurance company should adhere to the rules.

Ultimately, not having a certificate of insurance can hurt your chances of working on your terms. Financial ruin can kill your entrepreneurial spirit. Maintaining adequate coverage and proving it can keep your dreams alive.

Personal Liability Insurance Is Not Enough

Owning your business involves expenses. Cutting costs when it concerns insurance can do more harm than good. Insurance protects you and the people you come into contact with throughout your job.

Possessing personal liability insurance is essential for your personal assets, but you have to provide insurance specifically for your business to show you’re a responsible business owner. You have to demonstrate you are suitably covered. Not doing so can hurt your chances of success.

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