Often yes, and sometimes the law requires it. Employers generally need workers' compensation and state unemployment insurance under state law. Temporary disability insurance is required only in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico (US Department of Labor); there is no federal requirement. A solo owner may not be required to carry coverage, but general liability is the usual starting point for work in clients' homes. ProfitDrawer's cleaning guide budgets $100 to $600 for a solo cleaner's first months of liability insurance as an example.
Common types the SBA lists:
| Type | What it covers |
|---|---|
| General liability | Bodily injury, property damage, medical expenses, libel, slander, lawsuit defense |
| Professional liability | Errors, negligence and malpractice in services |
| Product liability | Harm from products you make or sell |
| Commercial property | Your equipment and property, from fire, storms, vandalism |
| Home-based business | A rider on homeowner's insurance for some equipment and liability |
| Business owner's policy | A bundle of the typical coverages |
For service trades, ProfitDrawer's guides also point to commercial auto insurance when you drive for work (personal policies may not cover business use), care, custody and control coverage for pet sitters, and a janitorial bond that some commercial cleaning clients ask about.
How to buy, per the SBA: list the accidents, disasters or lawsuits that could hurt your business, find a licensed commercial insurance agent, and compare rates, terms and benefits from several agents, since prices vary a lot.
Premiums are usually a deductible business expense. General information, not legal or insurance advice.
Source: Get business insurance (U.S. Small Business Administration) · Updated
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General information, not tax, legal or financial advice. Check the rules for your state and your situation.