I started walking my neighbor’s Golden for $20 a week. Then I added the Lab down the street. Now I’m making $400 a month in cash. I figured it was just “pocket money,” until the Lab tripped an elderly lady who broke her hip. She is suing me for $85,000. My parents’ homeowners insurance said, “That’s a business. You’re on your own.”
Key Takeaways
- The “Compensation” Trigger: The moment you accept money (cash, Venmo, gift cards) for a service, you are a business in the eyes of the law and insurance.
- Homeowners Denial: Personal liability (Homeowners/Renters) excludes “Business Pursuits.” They will deny the $85,000 claim instantly.
- Sole Proprietorship: You don’t need an LLC to need insurance. You are a “Sole Proprietor” by default. You are personally liable for all debts.
- Affordability: Business insurance for walkers is cheap (~$20/month). One lawsuit is life-ruining. The ROI is infinite.
The “Why” (The Trap): “Hobby” vs. “Business”
The IRS has a complex test for Hobby vs. Business.
Insurance is simpler: Are you paid? Yes? It’s a business.
Even if you are a 14-year-old kid, if you are paid to do a job, you have professional liability exposure.
The trap is thinking, “I’m just helping out.” The lawsuit doesn’t care.
[IMAGE: Graph showing “Cost of Insurance (
200)"vs"CostofHipSurgery(200)"vs"CostofHipSurgery(
85,000)”]
The Investigation: I Called Them
I asked agents, “I just walk 2 dogs. Do I really need this?”
1. State Farm Agent
- The Advice: “If you were mowing the lawn for free, I’d cover you. Since you take cash, you need a Commercial Liability policy.”
2. Thimble
- The Solution: Perfect for this. You can buy insurance “On Demand” just for the hours you walk. If you only walk 2 hours a week, you pay pennies.
3. Parents’ Umbrella Policy
- The Check: Even a $1 Million Umbrella policy usually requires an underlying valid policy. If the homeowners policy denies the claim (due to business exclusion), the Umbrella usually drops too.
Comparison Table
| Scenario | Personal Insurance | Commercial Insurance |
| Walking for Free | Covered | N/A |
| Walking for $20 | Denied | Covered |
| Walking for Barter | Likely Denied | Covered |
Step-by-Step Action Plan
- Buy the Policy: Go to PCI or Thimble. Spend the
150−150−200. - Raise Your Rates: If the insurance costs $20/month, raise your walk price by $1. The clients will pay it if you say “I am now fully insured.”
- Use an App: Apps like Rover cover the insurance (sort of) for walks booked on the platform. If you take them off-app for cash, you lose that protection.
- Contract: Even for neighbors, have a simple text/email agreement. “I am walking Fido. I am insured.”
FAQ
Does this apply to pet sitting in their house?
Yes. Paid house sitting is a business.
What if I’m under 18?
Minors can’t sign contracts, but their parents can be sued for the minor’s actions. Parents should buy the policy for the kid’s business.
Is cash untraceable?
In a lawsuit, lawyers will depose the neighbor. “Did you pay him?” “Yes.” Game over.