Imagine opening your dream business, but you have to close shortly after due to an accident or weather event. If you want to avoid a situation like that, you should invest in home-based business insurance.
Read on to learn more.
What Is Home-Based Business Insurance?
Home-based business insurance is a type of insurance that protects you and your business if you work from home. The most obvious use for this is if your business brings clients to you.
If something happens to a client while at your business, you will have coverage. Then, you won't have to pay as much in damages, and you can keep your business going if something happens to your home.
Even if you primarily work online, it can help to have home-based business insurance coverage. Then, if something happens to you or your home, you'll still be able to run your business.
Who Is Home-Based Business Insurance For?
Home-based business insurance is a fantastic tax deduction and is for anyone who runs a business out of their home. Coverage is particularly important if your company has a lot of inventory that you stored there as well.
You should also obtain home-based business insurance if you frequently have employees or customers visit your home. Businesses that hold inventory or that provide client services in person should pay for home-based business insurance.
Home-based business insurance is also useful if you will have a delivery person visit you often. The right policy may protect you if a delivery person trips or experiences another injury on your property.
Defining Home-Based Businesses
When looking at small home-based business insurance, defining home-based businesses is essential. A home-based business is any company that operates out of your personal place of living.
As long as you make money from home on your own venture, you have a home-based business. The rise of the internet has made it easier than ever to start a business out of your home.
Whether you provide a service, product, or both, your home may be your workplace. In that case, you qualify for home-based business insurance.
What Does Home-Based Business Insurance Cover?
Like any other business expense, you should know what home-based business insurance covers. There are multiple different insurance companies and plans with varying levels of coverage.
As you compare plans, consider the types of coverage plans provide. You should also think about the level of coverage and what your deductible will be.
Then, you can prepare for when you may need to make a claim. Filing a claim shouldn't affect your business's finances significantly, so keep that in mind when laying out your budget.
Consider some of the specific things a suitable home-based business insurance policy will cover. Then, you can make sure you select a plan that meets your needs.
Bodily or Personal Injuries
You can be as safe as possible and have others take steps to stay safe. However, you may not always be able to prevent personal or bodily injuries when someone is visiting your home-based business.
Bodily injury coverage protects you if someone sustains an injury on your property. Personal injury refers to any injury of someone's body, emotions, or mind.
If you use tools, such as hair styling tools, there are obviously a number of things that could accidentally go wrong.
You may also benefit from injury coverage if customers don't come to you. If you have employees that work from your home, you want to protect yourself against claims from them.
Consider how injury coverage is useful in a few cases.
Customers
Some home-based business owners choose to have customers come to them. Hairstylists, clothing stylists, and private music teachers are a few types of business owners that may work from home.
In these service-based businesses, customers will make frequent visits to the home. The more customers and visits you receive, the higher the chance of someone getting hurt will be.
You may take all possible precautions to avoid injuries, and you should do that. However, having home-based business insurance that protects you and your customers can offer you some peace of mind.
Delivery Persons
Another type of visitor you should consider when obtaining insurance are delivery people. You may have frequent visits from a delivery driver if you order supplies online regularly.
However, a delivery person may also visit your home often if you schedule a pickup from your home. This method is excellent for eCommerce businesses that receive a lot of orders.
If you don't want to go to the post office, you can save a lot of time. However, if your walkway has a layer of ice or snow on it, or if there are other issues, you want to protect yourself.
A suitable home-based business insurance plan will cover you if a delivery person experiences an injury. And you'll be able to ship packages from home with ease.
Any Type of Visitor
Perhaps you're looking to hire a new employee and want to meet them in person. Or maybe you teach music lessons and want to allow family members to sit in.
You should look for home-based business insurance that covers any type of visitor, not just customers and delivery persons. Even if you will have your employees work remotely or if you don't expect other visitors, it's better to prepare.
Then, as your business grows, you'll be able to accept people into your home. If something happens to them, you will know that you can file an insurance claim.
Office Equipment
Since your home serves as both your workplace and place of residence, you want to protect the things you use for work. Whether you have visitors or not, you should look for an insurance policy that will cover your office equipment.
Depending on your business, you may need a plan that covers your:
- Computer
- Printer
- Desk
- Clothing rack
- Hairstyling tools
- Musical instruments
Any business owner will also want to protect other equipment they use for work. While your home insurance policy may cover some of your items, it doesn't hurt to have extra coverage.
Then, if something happens to your home, you won't have to worry about your business supplies. Instead, you can file a claim and receive help with replacing the items.
Think about the items you use on a daily basis in your business. Look for a policy that will cover all of that gear and consider the amount of coverage you need.
On and Off-Site Inventory
Next, you should consider if a home-based business insurance policy will cover your inventory. This is vital for businesses that sell lots of physical products, such as clothing or electronics.
If you store your inventory in an extra bedroom or elsewhere in your home, you will need coverage for on-site inventory. Then, you'll be able to replace any inventory in the event of theft or damage.
Now, you may also need insurance to cover off-site inventory, such as in a storage unit.
You may want a policy that covers inventory in both places. Then, as your business grows, you'll be able to manage your inventory in a way that makes sense without sacrificing coverage.
Business Interruption
Business interruption insurance of any kind can help you recover lost income due to a disaster. This type of coverage is essential for any business, but it can be particularly useful for home-based businesses.
You may have to pause operations due to personal reasons, such as home renovations or a serious illness. When that happens, it can be devastating for your business.
Fortunately, business interruption coverage can keep your business afloat. You'll be able to bring in money when you can't run your business as normal.
Negligence, Omissions, Misconduct and Breach of Duty
You should also look for home-based business insurance that covers negligence, omissions, misconduct, and breach of duty. It may seem like you won't be negligent or leave anything out when conducting business.
However, you may forget something by accident. If you have employees who work with clients, they may leave something out or not fulfill the service as you promised.
Having some sort of coverage for this is vital. You'll be able to protect your business if someone sues you for negligence. While you shouldn't aim to be negligent, insurance will help put your mind at ease.
Crime
When you have a home-based business, your business stands to be vulnerable to a lot of the same things as your entire home.
No one should have to worry about crime affecting their business. However, being prepared is a security blanket, just in case.
The best home-based business insurance policy will have some sort of crime coverage. Then, you won't have to worry about safeguarding your inventory and office supplies at all times.
What to Look for in a Good Home-Based Business Insurance Company
Before you choose a home-based business insurance policy, you should consider what makes a company good. First, you should choose a company that offers all of the coverage you need.
You should also consider how much insurance will cost based on your business and the coverage. It's also important to know when and how you can contact the insurance company with general questions or to file a claim.
Make sure the company will be easy to contact and that they offer great customer service. Then, you'll be able to take advantage of your insurance whenever something goes wrong.
Is Home-Based Business Insurance Part of My Home Insurance?
Home-based business insurance generally isn't part of your home insurance. However, self-employed people and owners of smaller businesses can add coverage to an existing home insurance policy.
You will receive a bit of extra coverage for your business, though it may not always be enough. As your business grows, it helps to invest in a home-based business insurance policy that is separate from home insurance.
Then, you'll be able to cover all of the items you use in your business. You won't have to worry about your plan not covering enough, and you can have more control over the insurance plan you select.
Typical Costs of Home-Based Business Insurance
As with any other type of insurance, you can expect to pay a monthly premium for your insurance policy. You will need to pay this amount regularly, whether you file any claims or not.
If you do file a claim, you may also need to pay your deductible. This is the amount of money you will owe on something before your insurance policy starts to pay.
In many cases, the cost of your deductible will be less than what you would have to pay without coverage. It can be well worth having a good home-based business policy.
The Takeaway
Home-based business insurance may not be a requirement, but it comes in handy for many business owners. If you want to work from your home, you need to protect yourself, your equipment, inventory and the folks around you.
Insurdinary takes the guess work out of shopping for the best Home-Based Business Insurance policies. We have partnered with APOLLO Insurance and are thrilled to be able to provide you with not only the best coverage in the country, but with the best client service team as well. Engage with APOLLO today. One of their experienced agents is looking forward to working with you.
