The way of business and talent management has changed over the years. And the unanticipated COVID-19 pandemic fueled the rise of the gig economy.
A good number of researches and surveys conducted during this pandemic season proved that gig economy is here to stay as there in an increasing demand for business and companies hiring freelancers and remote employees, either full time or part-time. The sudden lockdowns of 2020 resulted to a lot of unemployment, retrenchment and businesses shutting down all over the world. But as a proverb says, every cloud has a silver lining. When everyone was required to stay at home, it opened doors of opportunities to work from home.
This global condition is not only beneficial to workers who found home-based jobs, it also gives opportunities for new businesses to kick off. Maybe you’re one of those who risked putting up a small business despite the uncertainties of the pandemic. Now, the question is, is your gig business insured? How can you get your business and your few employees covered? Read on to find the answers.
What Is Gig Economy?
The phrase “gig economy” was coined by a former New York editor named Tina Brown in 2009. She explained that gig economy describes the people taking free-floating projects, consultancies, and part-time bits and pieces while they transact in a digital marketplace. U.S. Bureau of Labor Statistics calls it “contingent workers.” Others call it freelancer economy, sharing economy, independent workforce or solopreneurs.
The gig economy redefines how work is done. It’s an environment that allows workers and business owners to work remotely from anywhere in the globe. There is no need for all the employees to be in one roof or close deals in an office because technology made it possible to conduct virtual meetings.
Some of the examples of gig economy businesses include selling or reselling products online or web-based stores and offering delivery services via digital platforms.
What Is The Current Trend Of Gig Economy In The U.S.?
It’s no surprise that gig economy is making a significant trend in the global market even in the continuing pandemic.
Monster®, a global online employment solution for people seeking jobs and employers who need great people, conducted a survey about gig economy. 92% of the respondents agreed that now is a good time to look into the gig economy. Among these respondents…
- 57% would take a gig job while they are in-between jobs
- 52% likes long term contract with flexible hours
- 39% wants short-term contract
Another study by daVinci™ Payments says that the gig wages and participation grew 33% in 2020 to represent 93 million U.S. adults earning $1.6 trillion compared to the 70 million adults who earned $1.2 trillion in 2019.
If you’re interested in knowing the trending career categories for freelance jobs this 2021, FlexJobs’ survey provides the top 15. These career categories had the most freelance job postings since March 1, 2020 and are also expected to remain trending this year.
- Computer & IT
- Accounting & Finance
- Project Management
- Customer Service
- Writing & Editing
- Education & Training
- HR & Recruiting
- Graphic Design
- Data Entry
- Mortgage & Real Estate
In another survey, FlexJobs also concluded that 36% of American workers have been doing freelance jobs during the pandemic. That made an increase of 2 million freelancers from 2019 where more than one-thirds are working full time.
What Is The Outlook In The Coming Years?
In the next five years, there is a projection that 54% of the U.S. adults will be working independently in the gig economy. Here are more views about the outlook of gig economy in the years to come.
“The freelance workforce grew at a rate three times faster than the U.S. workforce overall between 2014 and 2018.” — Freelancers Union and Upwork
Seeing the rapid growth of gig economy in the former years and today, we can expect that it will vastly grow in the next coming years.
“The workforce of the future will continue to look a bit different into 2021, but that could be a good sign. Historically, the staffing industry has been a leading indicator of economic recovery. As we look to 2021, I see guarded optimism for ongoing recovery across the majority of the key staffing sectors.” — Tim Robbins, VP of staffing and recruiting at Monster®
“The onset of the pandemic in early 2020 and the high amount of uncertainty from an economic perspective sent employers into crisis mode. Many of them announced hiring freezes and layoffs. As such, we saw a decline in contingent hires, but it quickly rebounded and increased higher than pre-pandemic levels. We expect contingent roles will replace many full-time, white-collar jobs going into next year.” — Kevin Akeroyd, CEO of PRO Unlimited
It seems that the traditional office environment will not return to its original set up, provided that there is now a better and more convenient way of hiring workers or being employed and doing the job online at the comfort of one’s home. Both the businesses and employees discovered the benefits of working remotely so most probably more workers would refuse to return to their 9-5 work routine.
Do Gig Businesses Need Insurance?
Even as the workforce changes, businesses still need insurance.
Delivery drivers might run into a road accident while delivering a package or goods. A home service worker might slip across the edge of something and fall while performing a domestic task. Or a dog might suddenly just bite the pet groomer while being groomed. On top of the physical risks that the workers might get into while at work, there are also liabilities that business owners must consider in order to protect the business and avoid paying beyond the business expenses. Some of those are the copyright infringement, damaging a neighbor’s property, lawsuits, etc.
In line with this, SynchronoSure® created a significant insurance that gives protection to both the employers and workers.
What Is GigbBOP And What Can It Provide?
SynchronoSure®’s GigBOP is a business insurance derived from the ISO Micro BOP Policy that became effective in April of 2020. GigBOP is designed to meet the needs of main street, small, home-based or service-based business and gig workers including small commercial tenants who do not have responsibility for the building insurance coverage through their lease. Its coverage is afforded for Business Personal Property, Business Liability and for certain miscellaneous Professional Liability.
With over 59 million Americans classified as freelance workers as of 2020, this segment is one of the fastest growing in the U.S. economy and with the ever-changing landscape, the demand for gig workers will continue to increase. The people and businesses that contract with small businesses ask them to provide proof of indemnification and, in many cases, these small businesses do not carry adequate indemnity. Check if your business is among the 75+ eligible classes we offer this product to.
By having a product that focuses on this unique segment of the market, it is possible to provide more affordable and relevant options by focusing on the unique needs of smaller businesses. And, for the owners of small businesses, including gig economy risks, carrying the right coverage protects your business and your assets. To learn more about this product, click here.
What Other Insurance Gig Workers Need?
There are many other insurance coverages that gig businesses and workers can apply for, depending on the needs and hazards of the business industry they belong to. Below are some of the benefits that those in the gig economy may look into.
General Liability Insurance is a coverage for the damages caused to a third party that the business will be held responsible for. It is a common insurance for small businesses and self-employed professionals.
This insurance can cover the following claims to a certain limit:
- damage caused by the business to someone else’s property or belongings
- medical costs for bodily injuries of visitors
- advertising injury such as stolen ideas, invasion of privacy, libel, slander, and copyright infringement from ads run by the business
- cost of legal services including evidence, witness and judgment fees
Professional Liability, also known as Professional Indemnity Insurance, but more commonly known as Errors and Omissions in the U.S., is an insurance that protects workers who gives advice or service if they are sued for negligence by a customer.
Workers’ Compensation is a state-regulated insurance that employers in the U.S. must provide their employees. In some states, part-time workers and contractors are included. This coverage pays for any job-related injuries, illnesses, and deaths. It pays for medical bills when the worker gets into an accident while performing a task at work. Additionally, it reimburses the lost wages if the worker is in disability. In the event that the injury or illness causes the worker’s death, the coverage will also cover the funeral services and will give financial support to the family.
Employment Benefit Liability is a coverage for the employer’s error in the administration of a worker benefit program. This covers the employment-related claims such as allegations of unwarranted termination, discrimination, workplace harassment and retribution.
Hired Non-Owned Auto Liability is an insurance that covers the claims and defense costs for accidents involving a hired or borrowed vehicles that is used for business purposes. If the business is charged of a vehicular accident, this insurance can pay for the attorney fees, settlements or judgments, and other legal costs.