Short-Term Liability Insurance

Learn more about the terms of this coverage and how to weigh the risks.

Matt Crawford
By Matt Crawford
Published Oct 16, 2023
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What is short-term liability insurance?

Short-term liability insurance is just what it sounds like: Insurance that only lasts for a short period of time.

Most business insurance policies have a one-year term. Short-term liability insurance policies can last a few months, a few days or even a few hours.

Risks associated with short-term business insurance policies

The biggest risk of short-term insurance policies is right there in the name: They are short-term. While you can get coverage that is similar to a full-term policy, it only lasts a brief period of time.

With short-term insurance, you’re only ever protected when your policies are active, potentially leaving gaps in your coverage. When you purchase full-term coverage, you have continuous coverage.

NEXT specializes in long-term coverage

The business insurance packages NEXT sell come with one-year policy terms that can be renewed before they expire.

Your coverage can be cancelled at any point with no additional fees.

How short-term liability insurance works

Short-term liability insurance generally comes in two flavors: Short-term general liability insurance and short-term professional liability insurance.

Short-term general liability insurance comes with the coverage you get from general liability insurance, just for less time.

Imagine you’re a carpenter who gets hired to install a set of cabinets. You might take out a short-term general liability policy for the day if that’s all the time you think the job will take.

If you accidentally damage a countertop while putting up the cabinets, you can get help paying for those damages, just like you would with an annual general liability policy.

However, if there is property damage or an injury after the day you have coverage — such the cabinets fall of the wall — you might not have protection to cover costs.

Likewise, short-term professional liability insurance can help cover you like a professional liability policy (also known as errors & omissions insurance), but only for the time you need it.

For example, say you’re an accountant who only works during tax season. You might take out a short-term professional liability policy for that stretch of the year.

If you make a mistake and a client sues you, the short-term professional liability policy can help cover costs while you have coverage.

If the lawsuit is filed after your coverage expires, you might not have financial help.

Who needs short-term liability insurance

While the examples above give you an idea of how short-term liability works, nearly any contractor or accountant could be better served — in terms of saving money and ensuring adequate coverage — with an annual policy.

Short-term liability is generally for those who aren’t really in ongoing business, but want to stay safe.

But if you plan to make a living out of your line of work, not only can you save money in the long run with a full-term policy compared to short-term liability, you can give yourself peace of mind in knowing that your business has the coverage it needs, all the time.

How NEXT can protect your small business every day

NEXT is 100% committed to helping small businesses. That’s why we make customizing your insurance easy with 24/7 DIY access.

You can start a quote, customize your options and access your certificate of insurance online in about 10 minutes.

Manage and update your policies when the time is right for you, not just during business hours.

Start your instant quote today.

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Matt Crawford
About the author

Matt Crawford leads NEXT's content team. He's a small business insurance specialist and has worked with business owners throughout his career as a community journalist and content marketer.

You can find him at one of his many favorite local restaurants in the San Francisco Bay Area when he's not at work.

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