Risk & Insurance
Gig economy risks as a small business owner
What the gig economy means for your business insurance

The gig economy has grown substantially in recent years. Although there have been concerns that it may negatively impact small businesses, some small business owners have successfully used it to secure new clients. As with most industries, when purchasing insurance, knowing the risks that commonly affect your industry and investigating the right types of cover to suit your risk profile is important. At the same time, this isn’t always straightforward. If you’re among the small business owners who provides some of your services through the gig economy, there are a few factors that affect the types of risk you may face, and are worth reviewing when you make decisions about types of insurance you may need and the kind of coverage that might suit your business needs best. 


Meeting clients in person 

If your service requires you to visit your clients’ homes, or meet them in person, there is a risk of you being held responsible for injury or damage to their property. For events such as these, a Public Liability insurance policy is usually worth considering. While some platforms may offer their own complimentary Public Liability insurance for these events, it’s possible you may already hold this cover as part of your usual suite of business insurance. If this is the case, you should take the time to find out whether your policy covers you for claims that occur as a result of work you perform through the gig economy – if you are unsure, an insurance broker should be able to clarify this for you.   


Providing a service/advice… 

Many professionals now offer services through gig economy platforms – bookkeepers, lawyers, and website designers are some of the services available. Advice-based services, however, carry a risk of liability if a client misinterprets your advice, or alleges your advice caused them financial loss, and takes legal action against you. Professional Indemnity Insurance is a cover worth considering for these instances, and can cover the cost of legal fees to defend yourself, as well as compensation you might be required to pay if a client does allege professional negligence on your part.  

You may even already hold Professional Indemnity insurance for your business, but it’s important not to assume you’re covered under your insurance as per normal. Similar to Public Liability, you should confirm with your broker whether your policy will cover you for the service you provide through the gig economy platform. Don’t forget to also ensure the services you provide are in line with your qualifications, and is what is listed on your Certificate of Insurance. If you are providing services that are not listed on your Professional Indemnity Insurance certificate, then you may not be covered if a client alleges professional negligence. 

Using services through the gig economy 

If you’re not securing new clients through the gig economy, it’s possible you may be using it to help with some of your business’s tasks. Some of the tasks available on these platforms include bookkeeping, data entry, user testing and IT support. If you do use the gig economy for some of your business support tasks, it’s important to keep in mind the risks that comes with it. For example, if the person you’ve hired makes a mistake in their work, or uploads a file under the wrong name, it could lead to you being held liable if a client alleges their privacy was breached. Depending on the policy you hold, as the person completing the task was not an employee of yours, your insurance may not provide any coverage for this type of incident. It’s therefore important to check with your broker before using the gig economy for your own business services. 


The gig economy for small business owners 

There’s no doubt the gig economy presents both opportunities and challenges for small business owners. Whether you use the gig economy for your business support services, or find new clients through the gig economy, it’s important to be mindful of the risks associated with both. A chat to your insurance broker about the policies you currently have in place, and the cover that’s available under them can help ensure you’re not left with gaps in your protection. 

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Aon has taken care in the production of this article and the information contained in it has been obtained from sources that Aon believes to be reliable. Aon does not make any representation as to the accuracy of the information received from third parties and is unable to accept liability for any loss incurred by anyone who relies on it. The recipient of this document is responsible for their use of it.