Business Insurance for Owners and the Self-Employed
Send your first invoice under your own name and three of the policies in this chapter quietly stop covering you. The homeowner’s policy caps business property at a token sublimit and excludes business liability. The personal umbrella excludes business pursuits (section “Umbrella Insurance”). And the LLC you formed for protection shields you from the company’s debts, not from your own professional mistakes: a client who loses money on your advice sues you personally, and the entity is no defense (section “Professional Entities”). A day job does not help either. The employer’s errors-and-omissions policy covers the work you do for the employer, so the weekend consulting engagement, the paid advisory role, and the expert-witness report are yours alone.
Buy coverage by asking what could produce a claim. For most self-employed people the list is short. A client who relies on your work product for money is a professional-liability exposure. A visitor to your office, or your crew at a client’s site, is a general-liability exposure. Client data on your laptop is a cyber exposure. Employees bring workers’ compensation, employment-practices, and auto exposures with them; outside investors bring D&O. Table 18.8 maps the common profiles to the policies that carry them.
| Profile | Carry from day one | Add as it grows |
|---|---|---|
| Solo consultant, advisor, or freelancer | E&O; home-business endorsement or BOP | Cyber once you hold client data; CGL when a contract requires it |
| Software or IT contractor | Combined technology E&O and cyber | CGL; media liability if you publish |
| Licensed practice (medicine, law, accounting, engineering) | Malpractice with a tail plan; BOP; BOE | Excess professional limits; EPLI once you hire |
| Any business with employees | Workers’ compensation; EPLI; hired and non-owned auto | Fiduciary liability and an ERISA bond once the 401(k) covers staff; crime |
| Company with outside investors | D&O — the investors’ rights agreement requires it | Key-person life and disability; run-off D&O at sale |
The stack costs less than most owners assume. Insureon’s 2026 data on policies bought by its small-business customers put the median annual premium at about $540 for general liability, $990 for a BOP, $1,050 for E&O (mostly at $1M per claim and $1M aggregate), $640 for workers’ compensation, and $1,550 for cyber (Insureon, 2026). A solo consultancy’s core — E&O, a BOP, and cyber — runs about $3,600 a year at the median, roughly what a litigator bills for one day on your case.