Insurance Considerations for a Hobby versus Business – Guest Post from Gaudette Insurance

It’s safe to say that many people have a hobby. For some hobbyists, it’s something to do for interest and enjoyment during free time. While for others, it is something to do for financial reward. 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 to consider insuring your hobby.

Let’s say Amanda is known throughout her town as an excellent cake baker and often is asked to make cakes and other similar treats for special celebrations.  What if someone picking up a cake slips on flour in her kitchen and breaks a leg? Will homeowner’s coverage apply?  It might not but a general liability policy could help cover this risk.

Check out another example. Read the rest of this blog post from Gaudette Insurance, here.