Hobby vs. Business: Why Insuring Your Hobby is a Wise Investment

While you should definitely consider having insurance for a business, it’s not necessary for your hobby. But here are a few reasons why insuring your hobby is a...


It’s safe to say that most of people have a hobby. For some of us, it’s something we enjoy spending our free time doing, while for others it is something we’d like to do for business. If the second one is you, and you’re interested in turning your hobby into a small business, then there are a few things about insurance you’ll want to know.

Do you have a Hobby or a Business?

A hobby is defined as something you enjoy spending your free time doing, but generally don’t get paid to do. A business, on the other hand, is something you do with the intention of making a profit.

The majority of states allow you to make a certain amount of money per year before your hobby becomes a business. If you suspect your hobby has become or is becoming a business then you’ll want to make sure you’re in compliance with the law. To do so, contact your attorney or local Small Business Administration (SBA) office, to help you navigate business law.

Should you Insure your Hobby, Even if it’s Not a Business?

While you should definitely consider having insurance for a business, it’s not necessary to have insurance for your hobby. But here are a few reasons insuring your hobby is a wise investment.

Assume you enjoy taking free pictures for people or like to give yoga lessons to your friends on the weekends. You may not think you need insurance, but here are a few reasons why you could benefit from it:

Taking photos on the weekend for free gives a person good photographs and helps hone skills as an amateur photographer, but what happens if someone gets hurt during the course of your shoot? The court may not see these for free photo adventures in the same light you do, but a general liability policy could help cover this risk.

Likewise, giving yoga lessons out of your home on the weekends allows you to do what you love, sharpen your skills as a yoga enthusiast, and prepare you for owning your own yoga studio. However, during your lesson, you have your students try a headstand and one student injures her neck. Though there wasn’t any serious damage done, your co-worker decides to sue, claiming you should not have instructed her to do that move at her level. To avoid a similar situation, you might want to consider professional liability insurance to protect you against these risks.

So is your hobby really a business?

If it is, be sure to insure it! When it comes to insurance there are a lot of different types and coverage levels. Be sure to speak with a licensed agent or broker who specializes in your industry to make sure you get the right coverage for your business.

Connect with YFS Magazine on Twitter.

Did you enjoy this article? If so, subscribe to YFS Magazine and never miss an update. Don’t forget to make our friendship official and join Young, Fabulous, and Self-Employed entrepreneurs on Facebook.

Photo: Berksha

Despite his History degree, Kevin Kerridge prefers to spend his writing time on small business management issues, including insurance for small business, the challenges facing mom-and-pop entrepreneurs, safeguarding strategies for small business in general and more.

In this article