What an LLC actually does and doesn't protect, what coverage your side hustle might already need, and the questions worth asking before you pick a policy.
Covers claims of injury or property damage caused by your business — often required by venues, clients, or landlords.
Your laptop, camera gear, tools, or stock — covered against theft, damage, or loss whether it's at home or on a job site.
Also called E&O — covers claims that your advice or service caused a client financial loss. Key for consultants & freelancers.
Covers costs from a data breach or hack — increasingly essential for any business that touches customer data online.
Required in most states once you hire employees — covers medical costs and lost wages from a work-related injury.
Covers your storefront, studio, or office space itself — structure and contents — if you lease or own a commercial space.
A consultant's biggest risk is usually a client dispute over advice given; a maker's biggest risk is usually a product causing harm. Start with what could realistically go wrong.
Some clients won't sign a contract without proof of liability insurance at a specific limit — confirm this before you even start comparing providers.
An LLC protects personal assets from business debt — it doesn't pay legal defense costs or settlements if your business gets sued.
Pricing and included coverage can vary meaningfully for businesses that look similar on paper — comparing matters here too.
Workers' compensation requirements often kick in immediately once you have employees, even part-time — this is a good trigger to re-shop your policy.
Ask for the specific per-occurrence and aggregate limits — not just confirmation that you "have liability coverage."
This is separate from general liability and covers claims that your advice or service caused a client financial harm — confirm it's included if you offer services or advice.
Some policies only cover equipment at a fixed business address — ask specifically if you work from multiple locations.
Ask how fast you can generate proof of coverage — this matters more than people expect once bigger clients are involved.
If you store any customer data — even just emails — ask whether this is included or needs to be added separately.
Ask specifically about your state's threshold for requiring this once you have employees, so you're not caught off guard.
The moment your hobby becomes income, your risk changes too.
Read it →Why "I formed an LLC" isn't the same thing as "I'm covered."
Read it →What a COI actually is and why bigger clients won't work without one.
Read it →If you store customer emails or payment info, this applies to you too.
Read it →Workers' comp requirements kick in faster than most founders expect.
Read it →