Regardless of your location, your business needs the right protection.
More than half of the businesses in the United States are based out of the owner’s home, with more being added every year. Many of those entrepreneurs think that their homeowners insurance policies cover their business needs when the unexpected happens, but the reality is that most standard home policies don’t. Not only is that untrue, but your home-based business activities can invalidate your home insurance.
What kinds of insurance do you need? There is no one right answer to suit every small business’s needs. The answer depends on exactly what kind of home-based business you’re operating. You may require several additional coverages, depending on your business activity and risk. In general, every business will want to protect themselves from liability claims, employee injuries, fraud, theft, vandalism, and more. Some coverages include:
- Property insurance
- Liability insurance
- Workers’ compensation insurance
- Business auto insurance
- Business crime insurance
Unfortunately, small businesses are easy targets for lawsuits, and it only takes one lawsuit to turn into a financial nightmare. Although you can’t entirely prevent a disgruntled employee or angry client seeking out a lawyer and legal action, you can protect what you’ve worked so hard to build with business liability coverage.
Keep in mind that your homeowners or personal umbrella policy may not provide coverage for incidents that take place while conducting a business. If a client visits your home for a business meeting and slips and falls, your homeowners insurance may not step in to handle liability claims as the visit was business-related. Without separate business liability coverage, the medical expenses associated with the injury could be your responsibility to pay out of pocket.
Your homeowners insurance will protect your business equipment in the home, right? Unfortunately, this is a costly mistake many home-based business owners make. Coverage for anything business-related, like your home office and computer equipment is usually excluded from your homeowners insurance policy. A dedicated business property insurance policy can help to recover and replace business items if they are destroyed in a disaster or stolen.