Do I Need Insurance to Do Business Under My Name? (Spoiler: Yes, Here’s Why)

When Your Name = Your Business (And All Your Liability)

When you do business under your own name, you’re operating as what’s legally known as a sole proprietorship. It’s the simplest business structure, but it comes with a major downside: there’s no separation between you and your business. That means if something goes wrong, your personal assets (yes, that includes your house, car, and savings) are fair game for lawsuits and claims.

Think of it this way: your personal savings account isn’t a force field against business mishaps. When you do business under your name without insurance, you’re essentially saying, “I’ll personally cover any damages that occur.” And trust me, those damages can add up fast.

Even if you are just starting out or have a side hustle, accepting payment for your products or services brings risk. Do I need insurance to do business under my name if I’m just getting started? Yes, liability does not consider your business size or revenue. It only takes one incident to cause a financial nightmare.

5 Nightmare Scenarios Where Insurance Saves Your Bacon

Still thinking you can skip business insurance because you’re “careful” or “don’t have many clients yet”? Let me walk you through some real-world scenarios that could happen to anyone doing business under their own name:

These aren’t far-fetched scenarios—they happen to real business owners every day. When you’re doing business under your name, insurance isn’t just a “nice to have”; it’s your financial safety net against these very real risks.

Insurance Types That Won’t Make Your Eyes Glaze Over

Now that I hope I’ve shown you that you need insurance for your business, let’s look at the main types of coverage to consider. I promise to keep this jargon-free and actually useful:

General Liability: The “Oops-I-Broke-It” Policy

General liability insurance is your first line of defense when doing business under your name. It covers third-party bodily injury, property damage, and advertising injury claims. Think of it as your “I accidentally broke something or hurt someone” protection.

Real-world example: A freelance photographer’s lighting equipment falls and injures a client during a photoshoot. General liability covers the client’s medical expenses and legal costs if they sue.

Typical cost: $300-$600 per year for most small businesses operating under their own name.

Professional Liability: For “My Advice Backfired” Moments

Also known as Errors and Omissions (E&O) insurance, this covers claims related to mistakes, missed deadlines, or professional negligence. If you provide any kind of service, advice, or expertise, you need this when doing business under your name.

Real-world example: A freelance accountant makes a mistake in their calculations. This causes their client to pay extra taxes and penalties. Professional liability covers the damages and legal defense.

Typical cost: $500-$1,000 per year, depending on your profession and revenue.

Business Property: When Your Stuff Is Your Livelihood

This covers your business equipment, inventory, and supplies against theft, damage, or destruction. When you run a business from home, your homeowner’s policy usually covers only about $500 of business property. This amount is not enough for most entrepreneurs.

Real-world example: A graphic designer’s $2,500 computer and $1,000 tablet are stolen from their car. Business property insurance covers the replacement costs.

Typical cost: $300-$500 per year for $10,000 in coverage.

Home-Based Business Insurance: When Your Office Is Also Your Living Room

If you’re wondering “do I need insurance to run a business from home under my name,” the answer is definitely yes. This specialized coverage bridges the gap between homeowner’s insurance and business insurance for those operating from their residence.

Real-world example: A client slips on your icy front steps while coming for a business meeting at your home office. Home-based business insurance covers their medical expenses, which your homeowner’s policy would likely deny.

Typical cost: $250-$500 per year for basic coverage.

Bundling Secrets: How to Save Like a Pro

Now, let’s talk about everyone’s favorite topic when it comes to insurance: saving money. Bundling your home and auto insurance can save you money. The same goes for business insurance policies. Bundling them often gives you big discounts.

Think of it like buying chips and salsa—sure, you could buy them separately, but the combo pack is almost always a better deal. Here are some smart bundling options when you do business under your name:

What Will This Actually Cost Me? Price Comparison

One of the biggest objections to getting business insurance when operating under your own name is cost. But let’s put this in perspective with some real numbers:

Now, compare these annual premiums to the potential costs of a single claim:

The “Do I Need Insurance?” Decision Guide

Still not sure if you need insurance to do business under your name? This simple flowchart will help you decide:

Getting Started: Your Next Steps

Ready to protect your business properly? Here’s how to get started with the right insurance coverage when doing business under your name:

The Bottom Line: Insurance Isn’t Optional

So, do you need insurance to do business under your name? The evidence is clear: yes, you absolutely do. Operating without proper insurance coverage puts everything you’ve worked for at risk. One accident, one mistake, or one unhappy client could wipe out your savings and derail your business dreams.

Insurance isn’t just about protection—it’s about professionalism. It shows clients you’re serious about your business and prepared for contingencies. It gives you the confidence to take on bigger projects and clients. And most importantly, it lets you sleep at night knowing that a single mishap won’t destroy everything you’ve built.

Don’t wait until after something goes wrong to get the coverage you need. A small monthly investment in good business insurance can help you grow and succeed in the long run.