Every business needs insurance. Knowing which type of insurance you need and the best place to get it is the next step.
This article will cover the main types of business insurance and help you find the best online tutoring insurance.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for an Online Tutor
The most common and comprehensive type of insurance for online tutors is general liability insurance, especially if you tutor from your home or students’ homes. However, even if you only tutor online, we recommend general liability insurance as your first line of defense against a variety of the most general and commonly occurring claims.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While an online tutor business may not be legally required to carry general liability insurance, operating without it is risky. If your online tutor business is sued, you could face fees totaling tens or hundreds of thousands of dollars (or more).
Cost of General Liability Insurance
The cost of your tutor business’s general liability insurance will highly depend on whether you tutor in person or online and the size of the business. While home tutoring businesses in America spend an average of $400–$700 per year for general liability insurance, online tutoring businesses often spend much less, starting as low as $100 per year for general liability insurance coverage.
Compare the average cost of general liability insurance for online tutor businesses to other professional industries using the graph below:
Several factors will determine the price of your insurance policy. These include your:
- Whether you tutor in person or solely online
- Number of employees
- Area of specialty
- Volume of business
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
Common Situations That General Liability Insurance May Cover for an Online Tutor Business
Example 1: Your computers experience a data breach and some private emails and notes regarding a client are published online. Your client sues you for personal injury to their reputation, claiming you are ultimately responsible. Your general liability insurance may assist your business in covering some of your legal cost and part of any court order or settlement.
Example 2: You use an online logo maker to make a logo for your tutoring business. However, another company with an extremely similar logo claims that they were using the logo first and you are infringing on their copyright. Your general liability insurance should assist you in mounting your legal defense and may pay a portion of any settlement or court ordered judgment if you are found liable for copyright infringement.
Example 3: You create an online advertisement for your tutoring business and use a screenshot of one of your online tutoring sessions with one of your students featured in it without their permission. Your student’s parents are very upset and sue you for an invasion of privacy. General liability insurance should help you mount a legal defense and may pay for part or all of any settlement or judgment should you be found liable.
Check out our review of the Best Small Business Insurance Companies.
Other Types of Coverage Online Tutoring Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of.
Commercial Property Insurance
If your online tutor business owns any type of property worth $10,000 or more, you will need to invest in a commercial property insurance policy to insure your business’s assets. Many online tutor businesses quickly rack up this amount in computers, fixtures, furniture, and inventory.
Commercial property insurance helps cover the costs of replacing/repairing inventory, equipment, real estate, and more in the event of unexpected damage.
Commercial Umbrella Insurance
For some online tutoring businesses, commercial umbrella insurance is another policy to consider. Commercial umbrella insurance exists to cover those gaps beyond existing policies, ensuring that your online tutor business doesn’t find itself crippled by an extreme and unpredictable loss.
Commercial Auto Insurance
If your online tutor business owns a vehicle for any business-related reason, you will also need a commercial auto insurance policy. This insurance policy will cover automotive damage incurred if your automobile or delivery vehicle is damaged on the road.
Cyber Liability Insurance
Another type of insurance that online tutoring businesses may want to consider is cyber liability insurance. In the event of a data breach or other cyber security incident, a business should have cyber liability insurance in place to cover the costs associated with the breach as well as any additional losses the firm may incur.
Home-Based Business Insurance
If your online tutor business is run from home, your normal home insurance policies may not cover accident damages related to your business.
Home-based business insurance is designed with this in mind, and it is often available through a business owner’s policy or as a rider extension for existing homeowner's insurance.
Professional Liability Insurance
Professional liability insurance, sometimes called errors and omissions insurance, is a must-have for any type of business or professional service, even for online tutors. When you are an online tutor, providing a service to your client, you could be sued for providing erroneous advice or making a mistake. Errors and omissions (E&O) insurance helps protect your business in the case of costly mistakes, oversights, or omissions.
Worker’s Compensation Insurance
In most states, if you have any employees other than yourself (and sometimes family members), you will need to purchase worker’s compensation insurance. Workers' compensation insurance, or "worker’s comp” for short, is a type of insurance that covers accidents, injuries, and illnesses that employees may suffer on the job. Worker’s compensation coverage aids with the payment of medical expenses, missed wages, and other costs associated with illness or injury, no matter who was at fault.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your online tutor business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Business Insurance Is the Best Way to Protect Your Business
If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.
Be sure that everything you've built is safe by getting business insurance.
Online Tutor Business Insurance FAQ
Can I buy business insurance online for my online tutor business?
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start an online tutor business?
You should invest in business insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my online tutor business from everything?
Not necessarily. Certain exceptions may be written directly into your online tutor business insurance policy, and some perils may be entirely uninsurable.
Is general liability the same as business owners?
A general liability insurance policy covers only liability losses. A business owner's policy covers both liability and property losses.
How do I choose the best general liability insurance?
The best general liability coverage for your business really depends on the amount of coverage you’re comfortable with and how often you expect to file a claim. A relatively safe business with a very low risk of accident or legal liability could opt for lower premiums with higher deductibles.
However, if you are in an accident or injury-prone industry or are making advertising claims about the effectiveness of your service or product, you may wish to consider more extensive coverage. We recommend using a digital insurance provider like Next Insurance.
Do I need business insurance if I already have an LLC?
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.