Photo by nikcname
Nowadays, there are many individuals who run a business from the comfort of their home. Anything from your own food business to tutoring services can be done at home.
Yet while you can enjoy your lack of a daily commute, along with other advantages that give you bragging rights over your friends, you need to have the right insurance to protect yourself. Unfortunately, insurance (along with taxes) is a downside of home businesses. However, business insurance is a necessary evil, along with those that you already should have, such as health insurance.
Universal Home Business Insurance Needs
While there are exceptions to every rule, there are at least two insurance types that you probably need if you run your own home business. For instance, a freelancer may never have a client step into their home or work area, making general liability insurance possibly irrelevant.
1. Contents Insurance
Via business or your home insurance, you will need contents insurance to protect items that are within your home. Your home office likely has, at the very least, technology that would be expensive to replace.
An interesting misconception here is that most home-based businesses rely on their home insurance to cover home-based business activities. This is false. Additionally, these activities could possibly void your home insurance; business practices are not initially covered under home insurance, as you are using your home for other purposes.
Look to add contents insurance to your home insurance or business insurance plan. Look at your business equipment and gauge how much it would cost to replace.
Warning! If you take your equipment outside the home, a contents insurance clause in addition to your home insurance will likely not cover it. You may want to begin with business insurance if you fall into this category.
2. General Liability Insurance
What happens if a family member falls and gets injured at your home? Your home insurance plan will cover this. What about a client getting hurt at your home?
General liability insurance will cover injuries that occur in your home, in relationship to business practices and locations. A majority, but not all, of home businesses will need general liability insurance.
Other Considerations and the Buying Process
With only two types of insurances listed, you might think you’re free and clear – or you know better. However, there are several other types of business insurances that may apply to your situation.
Here is a quick, but not comprehensive list that you should consult. Take note of those that are relevant to your home business:
- Product Liability Insurance: If you sell a product, this is a given. This will protect your business from liability regarding a product’s non-performance.
- Professional Liability Insurance: For you and your clients, this insurance protects against damages as a result of your actions as a professional.
- Vehicle: If you use your vehicle in regards to your business, it will need to be insured.
- Malpractice Insurance: If you provide a service, such as a treatment, you will need malpractice insurance. This isn’t just for doctors and the like; even a hairdresser, dog groomer, or other business would need this.
- Completed Operations Coverage: If you go to a client and perform a service, you could be liable for an injury that occurs as a result of it.
- Errors and Omissions Insurance: For those that give professional advice, this insurance can protect you from liability if a client has suffered damages as a result of your advice.
- Business Interruption Insurance: If you can’t work due to some event (fire), you can receive your revenue until it is possible to start work again.
- Disability Insurance: All businesses should consider this, which protects you in case disability strikes your business.
Look for packages that surround home-based businesses. You might be pleasantly surprised to find they include some of those listed above. You can also consult your agent to see how all of these elements can be customised to keep your premiums low.
Compare rates, talk to your home insurance agent as well as your business insurance agent, and look at group rates (through professional/business organisations) to get the best price and coverage. Once you get everything taken care of, you can relax and know that your home business is safe. To some extent, all home businesses need some of these insurances.
Related posts: