Important Types of Insurance Coverage for Doctors’ Consulting & Side Gigs

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In today’s fast-paced world, Having a side gig alongside your regular job is a great way to build a business and earn extra income. Protecting it with the right types of insurance coverage adds security against unexpected risks.

Table of Contents

Why Do You Need An Insurance Coverage For Your Side Gig?

A side gig or a business may be beneficial for several reasons. You can be your own boss, work remotely, set your schedule, and get paid for your services accordingly

Nevertheless, there are some associated downfalls if you don’t have a subsidized insurance policy. If you provide a service that is susceptible to interruption, lawsuit, or property loss, you will need to protect it with insurance coverage.

Your side gig could be anything. Having the right insurance coverage could give you an extra layer of protection from any unexpected risks.

Different Types of Insurance Coverage for Side Gigs

You should consider any side gig as a “small business” and get insurance coverage. Below are a couple of insurance policies that briefly describe how to choose the right one for your gig.

1.  Business Owner’s Policy

A business owner’s policy is a packaged solution that offers the most protection and covers the essentials for a small business. It typically includes professional liability, business interruption, property, vehicle, and crime insurance. This policy is highly customizable, allowing you to tailor the coverage to your specific side gig. By exploring various types of insurance coverage, you can enhance your business owner’s policy with additional or more comprehensive options to ensure maximum protection for your business against unexpected risks.

  • Professional Liability Insurance:  This policy covers claims and lawsuits due to negligence, failure to perform, accidents such as bodily injury, or property damage to a customer, partner, or third party.
  • Property Insurance:  This policy helps cover unexpected damages in the event of natural disasters, fire, storms, theft, etc.
  • Crime Insurance:  It offers protection for your property from theft, forgery, and fraud.
  • Vehicle Insurance:  If you are using your vehicle for business or providing services for a fee, you can opt for comprehensive commercial auto insurance.

The above policies offer protection to your business and personal assets in case of lawsuit or damage. Discuss with an insurance agent about your side gig so that they may find you the best policies with the right amount of insurance coverage.

2.  Cyber Liability Insurance

This policy helps your computer systems and software from cyber damage. Someone may hack your system, and confidential data such as client’s personal information, social security numbers, credit card numbers, addresses, etc., may be stolen. In such cases, your clients may sue you for a breach of privacy.

Cyber liability insurance helps cover lawsuits or settlement costs. It may also cover data retrieving, personal and client loss from identity theft, fines/penalties, legal defense, etc.

Data Breach Insurance likewise covers both cyber and paper breaches. Cyber liability offers more cyber protection for a cloud-based company. If your work involves storing data in the computer system and paper-based data, data breach insurance would be the right choice.

3.  Personal and Advertising Injury

This policy covers costs related to copyright infringement, privacy invasion, libel, defamation, intellectual property, and more if someone sues you. However, it doesn’t cover situations where another company slanders or infringes on you due to your accidental actions.

4.  Workers’ Compensation

If you have hired at least one individual to help you, you can go for a worker’s compensation policy. It protects you from any lawsuits that may result due to employee injuries during working hours. It also provides medical benefits and employee wage replacement while the employee is out of work due to the trauma. Most states necessitate workers’ compensation for W2 employees.

5.  Accounts Receivable

If you are using invoices to get paid for large services and your client doesn’t pay up, you could be at a loss or have a negative cash flow. Accounts receivable insurance helps with the revenue loss by repaying if you cannot retrieve it from the client for whatsoever reason.

The insurances mentioned above are a few among the most popular ones. If you have a side gig or intend to start one, it is important to do extensive research on various insurance policies that fits your side gig to protect yourself and your assets.

What Types Of Insurance Coverage Is Needed For Chart Reviews, Expert Consulting, etc.?

Physicians starting or managing a side hustle outside their primary practice should carefully assess liability concerns. Preparing for unexpected risks involves exploring different types of insurance coverage, such as professional liability insurance. Depending on the nature of the work, this may include Malpractice Insurance for healthcare-related roles or Errors and Omissions Insurance for consulting and advisory services, providing protection against potential lawsuits and financial risks.

This insurance policy protects you if a client lodges a liability lawsuit in case you caused them financial harm and didn’t live up to your professional obligations. Hence, professional liability insurance offers protection for your business against any claims such as general negligence, unintentional mistakes, violations of good faith, and inaccurate advice.

Before opting for professional liability insurance, you must also check your state’s rules since some industries provide coverage. As an independent service provider, you must evaluate your risk exposures and consider coverage since you may not have the financial resources in the event of litigation.

When Do You Need Malpractice Vs. Another Type Of Insurance (Such As Errors & Omissions)?

The magnitude of risk and liability in your side hustle greatly depends on the kind of service you provide and the tasks performed. One should bear in mind the risk isn’t based on the chances of you losing a lawsuit but rather the prospect of a client filing a liability lawsuit against you. Defending against a lawsuit can impact you financially and certainly drain your bank account.

Malpractice Insurance is also referred to as professional liability insurance for medical and legal professionals. It is crucial for people who provide healthcare services, such as nurses, opticians, dentists, physical therapists, etc., to have this coverage. It protects the healthcare professionals against allegations of negligent acts causing harm to the patients.

Depending on the situation, you can purchase a malpractice insurance policy for yourself or a group through a private insurer or state and local agencies if necessary. Before purchasing, explore and understand the policy’s offerings. Choose policies that provide maximum coverage and include defense outside the limit.

Errors and Omissions (E&O) Insurance is a kind of commercial liability coverage. It shields your business against allegations arising from negligent acts or failure to provide proper service or advice. Any business professionals such as physicians, computer consultants, architects who provide service or advice for a fee may be exposed to professional liability claims.

Opting for professional liability insurance may help cover litigation costs, settlements, and judgments if a client sues you for a professional service mistake.

Does All Consulting Require Liability Insurance?

A client may file a professional liability lawsuit over a small dispute. They could even accuse you of negligence, even if you didn’t make any errors.

Lawsuits can be expensive, and many independent consultants don’t have financial support or a legal team to stand by. Hence, Professional Liability Insurance provides coverage for defense costs and other legal fees.

Consultants can face professional liability claims in cases of perceived or actual work errors, such as:

  • Improper documentation
  • Loss of data, negligent handling of data, improper procedures
  • Missed deadlines
  • Breach of nondisclosure
  • Misrepresentation of facts
  • Failure to prevent a data breach

Assess your work risks and choose the right professional liability insurance to protect your services and assets from financial loss.

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