When you’re starting out with your home-based business, chances are you’ve got a lot on the go. But, while you’re busy growing your business, you also need to protect it because your business’s success can be affected by events often outside of your control.
Take control, as much as you can, with these insurance tips for home-based businesses.
Don’t rely on your home insurance to cover your business
If your work and home share the same space, you might think that your home-based business is automatically insured under the liability and contents coverage of a typical home insurance policy. It’s not, and this is a common misconception that could leave you exposed should something go awry.
Keep your home insurance provider up-to-date about your business
Your homeowner’s insurance policy is meant to protect your home as a residence, not as a place of business, and when you combine the two-your home with your business-you may be jeopardizing your coverage. You’ll want to give your home insurer a call and let them know that you work out of the home. Depending on the insurer, you may find you have to switch companies because some won’t provide home insurance if a business is on the premises. But, it’s better to know now, because the last thing you want to do is find out when it is too late that you’re without home insurance.
Get coverage for your business property and, more importantly, liability
When thinking about getting coverage, many people focus on covering the financial loss of tangible items, like inventory, business equipment, tools, computers etc. While ensuring your “stuff” is important, the greatest risk to your home-based business is likely to be liability, and a home-based business insurance policy can ensure you’re protected if:
- someone who is visiting your home for business purposes slips and falls;
- there are problems with the product you’re selling or the service you’re offering and you’re successfully sued; and,
- you cause damage to a customer’s property.
Look into policies that include business interruption
If an event, like water damage or a fire, makes it impossible to work out of your home, business interruption coverage will replace your lost income and cover expenses while repairs are being completed. If you’re able to temporarily relocate your business, the coverage will pay for those extra expenses as well.
Consider professional liability coverage
If your home-based business involves providing professional advice you may need a home-based policy that includes errors and omissions coverage. A mistake that causes a client to lose money, or causes harm in some way, could be financially devastating to your business if it leads to a lawsuit.
Cyber coverage isn’t just for big businesses
Technology has made it easier than ever to run a business from home, but it has also opened up a whole host of risks. Small businesses are often the target of hackers and a home-based business insurance policy can be customized to include cyber coverage that will help offset the costs associated with a network or privacy breach.
Pay your premium all at once, rather than in monthly installments
If you pay your premiums monthly, rather than annually, you’ll likely pay a bit more as it’s common for companies to charge a little extra to cover the cost of administering monthly payments. If you can afford to pay your premium in one lump sum each year, you’ll save a bit of money.
Review your policy with your broker at least once a year
No business is stagnant. Review your coverage annually, or any time there’s a significant change (like a new initiative or you hire help) to ensure you’re protected when you need it most.
Just like your personal auto insurance and home insurance, home-based business insurance premiums can vary considerably. What you might pay with one insurer is not the same as what you would get with another. It pays to compare home-based business insurance quotes to make sure you’re getting the best price for the coverage you need.
Questions about business insurance? Contact us!