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Thursday, 27 June 2019
Agent Resource Center
This Old House - Do-it-Yourself

Why You Should Insure Your Home-Based Business

Written by Posted On Wednesday, 12 June 2019 16:54

It is not uncommon for a business to be run out of a home. The amount of these types of companies grow each day and many take the leap of becoming their own bosses, with their offices in their own humble abode.

One of the most often overlooked aspects of running a in-home business is whether the company is properly insured. Most standard home insurance policies will not cover liability of incidents under the name of the business. Since accidents can occur anywhere, having yourself (and your home) professionally protected could save both your property and your business.

Insurance Types And Why You Need Them

There are different types of coverage, so a basic understanding of the actual insurance types is needed to be fully protected. Insurance packages will depend on specifically what kind of business you are running and its everyday operations.

To get home-based business insurance, you can have an extension put on your home insurance. It is very straightforward, and a call to your insurer will clarify the exact details of their extended options. Some packages can be economically better when combined, so sticking with one insurer can be a bonus if bundling types of coverages.

Begin with understanding why you must have some type of coverage, and decide from there what insurance add-ons are needed in your specific case.

Equipment Coverage

Dependent on the type of insurance, all equipment in your home used for work would be protected. When working in a home office, all supplies are usually purchased by the homeowner/company CEO, so there is a lot more at stake. Most homeowners insurance will not cover equipment which is technically property of the company, so this property will need its own insurance.

Understand what your home office equipment is worth. If it were to become damaged, or stolen, how much would it cost to replace it?  After having this estimate, you will have an idea on the amount of insurance you’ll need to be completely covered.

Property insurance on your business items is not automatically covered by the home policy. Many businesses move equipment, like using a work laptop at a coffee shop for a change of scenery. If anything were to happen to your property when it is not on your covered property, no insurance will pay out for the device or devices.

Customer Liability

Liability in cases pertaining to clients is the most important aspect of insurance, whether at home or in a commercial office space. It will cover anything from property damage or costs due to insufficient or ruined work.

This is important for all companies that make deliveries as well. If a delivered package is stolen the consumer will demand a replacement or a refund, these costs will then be the responsibility of the company owner.

When running a company at home, there are multiple ways home-visits or appointments will be viable. If performing these services, your home must take safety precautions and one of these methods is insurance. Home insurance may cover guests on your property, but you will need coverage for your business if that person is visiting your property as a customer.

You may think a customer is easy going, or would never sue you, but when money is involved (or an injury) you need to protect yourself.  Consumers injured on your property will be entitled to compensation and without the proper insurance this could be coming right out of the owners pocket.

Employee Coverage

Just because a business is run out of your home, does automatically mean you do not have any employees. These other bodies need coverage in case anything happens while they are working for you. Employees in home based businesses are often close friends or family, this should be additional motivation to ensure they are covered so the relationship is not ruined. When an incident occurs, it will be you in charge of securing a Top Injury Lawyer, for yourself or your employees.  

Vehicle

If a vehicle is used in your business, basic auto insurance can provide limited coverage. Liability for all those in your vehicle would need to be substantial for all costs to be covered if there was an unsuspected incident.

Know the amount of people who are transported on a regular basis, so you do not pick too low of coverage limit. In most accidents, all parties involved are injured in some capacity, so make sure each individual can be filed under the liability insurance, without you paying additional fees.

Errors and Omissions

Errors and Omissions Insurance cover the line between helpful and disastrous advice. If you are found to have guided any customers wrongfully, even if unintended, they can sue for damages on their career, or person.

This covers those unstately situations. Being sued is never planned, but always protect your company, even if most of your clients are family or friends. Having a thorough insurance plan can limit litigation costs.

Do not pass over the option to expand your insurance into your home-based business. If you have property, and clients to worry about, you need to make sure your insurance fully covers them. Accidents are untimely, and usually come when you least expect them to. Do not put your business and home at stake by not having the proper home-based business insurance.

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