subject: Self Employed Liability Insurance - The Forgotten Necessity [print this page] As the economy continues to sputter, people start to run out of unemployment benefits and job prospects are slim, more people are considering self-employment. Whether this be as an independent contractor in a particular field or opening their own retail or e-commerce business, there are multiple considerations one must make before committing to self-employment or running their own business: working capital, taxes, vacation, self employed liability insurance, and potential employees, just to name a few. The decision to become self-employed can be an exhilarating or stressful experience depending on your due diligence. Getting all the facts and weighing the options will make the process go much more smoothly than diving in blind.
Most people take into consideration major aspects of self-employment; yet tend to forget about underlying costs. Very few people choose to start a business they won't enjoy and most are smart enough to run the numbers and determine profit feasibility. What typically happens is that although they factor in things such as rent, electricity, and postage, in essence all the obvious costs, what they tend to omit are the ancillary costs of being self-employed. For example, when selling a product overseas, very few people factor in customs charges, time spent correcting mistakes or the cost of self-employed liability insurance to cover potential mishaps. Most small businesses fail to be sustainable not because the concept was a poor one or that consumers did not desire their product or service. Most of them fail due to unforeseen expenses that could have easily been factored into the business plan and absorbed with working capital. One example that comes to mind is an old family friend that was a self-employed electrician; he had no employees and was quite content with his small business. He made a silly mistake and damage was caused to his clients building. He never thought about self employed liability insurance and the costs put him out of business.
These seemingly little things like a valid business license, federal identification numbers and self employed liability insurance, all in which had no bearing on his ability to do electrical work or complete jobs, in essence, bankrupt him. When considering a career change, whether it be opening your own business, working as an independent contractor or taking a new position with a corporation it is extremely important to take each and every potential downfall into consideration, as well as the benefits. With proper due diligence, determination, and frankly, a strong support system you can make a living doing something you love.
by: Sal Trump
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