Home business owners must know this about insurance.

Unfortunately, home-based business insurance is often neglected. Numerous people own their own homes and expect that their home insurance will cover their home-based businesses. Sadly, this may not be the case.

Of course, Operating a business from home has various benefits. But this won’t mean that the venture is risk-free. Like any other traditional business, home-based businesses face some unexpected challenges.

Entrepreneurs often start their businesses from home. They often rely on other insurance coverage to protect their home-based businesses. In fact, many home-based business owners depend on their home insurance to cover loss, damage, and theft of property. While other insurances may protect your home, it may not insure parts of your business. You may need additional business insurance. Read on to know more.

Why Home-Based Business Insurance Matters?

Depending on your homeowner’s or renter’s insurance to cover the business risk is not right. Typically, these insurances exclude business coverage. This implies that, for instance, the insurance may not include client injuries that might occur at your home. These policies often do not provide coverage for any harm caused to your business including to: 

· Computers and printers.

· Office furniture.

· Inventory. 

· Technology

· Professional equipment

· Property damage

· Lawsuits

· Employee injuries

· Issues related to data loss

Home-based business individuals, like self-employed professionals, should consider home-based business insurance to protect their business resources.

Obviously, business insurance is essential for various reasons. It can help cover the expenses of legal issues and claims made against your business. Without proper insurance, the business might have to pay the cost of such a suit out of their own funds.

Do you need home-based business insurance?

If you are a home-based business owner, you need to ask yourself some essential questions.

· Do customers or clients visit my home-based business?

· Do I keep the stock and supplies in my home?

· Would I lose revenue if I need to close my business because of specific damage to my home?

· What are my responsibilities towards the employees working in or outside of my home?

· Do I maintain customer’s and employee’s records on my home computer?

If you find yourself answering “yes” to any or all of these questions, then you should consider purchasing the right type of coverage and coverage limits. A home-based business owner’s insurance may well be required to address these issues.

Home-based businesses can range from small consulting/counseling practices to bigger retail operations. To protect your business, you should precisely assess the risks you may face and choose insurance accordingly. These include damage to equipment, real property and buildings, inventories, and other business assets. To protect against any losses that may arise in your business, a variety of insurance policies are available that cover all the risks. Some of the facets to consider insuring include:

Clients in the home: Business-related visitors, such as clients, or vendors, coming to your home indicates you may need commercial general liability.

Business property: Any computers, inventory or equipment that is exclusively for business use should be insured.

Professional services: Business owners who provide support such as financial advice or bookkeeping may need to be covered for liability arising from the deemed improper provision of such services or their impact.

Employees: Hiring employees may indicate you need workers’ compensation insurance.

If any of the above applies to you, a home-based insurance policy will likely not cover your business activities.

General Liability Insurance is one of the most flexible insurance policies for home-based business owners of all walks as it helps to pay for legal costs in situations like: 

  • Third-party bodily injuries that might occur like a delivery person slips and falls on your icy sidewalk.
  • Bodily injuries caused by the products you sell.

Another beneficial cover is a Business Owner’s Policy. A Business Owner’s Policy is a popular, affordable choice for home-based business owners. This insurance coverage can help you pay for any damaged or stolen business property. The business owner’s policy is an investment in the business you should make. Your business could suffer a loss due to damage or low income if operations get suspended. The Business Owner’s Policy includes coverage against that risk. It can provide coverage to replace lost income.

Insuring your business is simple and can be pretty useful as well as affordable. Without the right insurance, your business could become susceptible to significant risks. And that holds true for home-based businesses too.