These are two questions we get often. Many people now conduct business from their home—selling products from their spare room, doing someone’s taxes from their dining room table, or running a consulting operation from their renovated garage. Often running a home business means flexible hours, more time with family, lower costs, and tax breaks. But like any business venture, running a business from your home comes with risks. Whether it’s a part-time side business or a full-time operation, every person who runs a business from their home should consider home-based business insurance to help protect themselves and their products from the unexpected.
Home-based business insurance is often an extension of your home insurance policy. Since standard home insurance policies do not usually extend to protect equipment related to a business, nor do they protect you from the loss of your home office, nor from damages, if you’re sued, getting a home business insurance policy added to your property insurance is an important step towards peace of mind. However, if you’re business is bigger than a one to two person operation, you might want to consider getting standard business insurance.
So, what does home-business insurance protect you against? Home-based insurance usually covers three things:
- Business Property
- Business Interruption
- Legal liability
Business property includes any property kept on or off the premises, including supplies, tools, computers, and products. So, if your home-based office is robbed or damaged, business property coverage will help you replace or repair your needed equipment.
Business interruption covers you if your home-based office is damaged and therefore no longer usable—perhaps because of a fire or flood—and you must find a temporary place to work. Business interruption coverage would pay the cost of your temporary office relocation.
Legal liability provides coverage if you’re sued because your company’s products or services have caused harm to a customer, or if someone is hurt while visiting your home-based business. Legal liability will help pay for your legal defence or pay out compensation ordered by the court.
What kind of protection you need for your home-business is based on your individual operation. Do you provide a professional service that might require you to get Errors & Omissions Insurance to protect you against things like breach of contract, inaccurate advice, or delay in delivery? Is your business too big to be adequately covered by an extension to your home insurance policy? Do you need coverage to protect you from the loss of a business partner? Do you need vehicle insurance for your business vehicle? These are all questions you will discuss with your insurance broker to insure you have the coverage you need to protect and grow your home business. Every case is as unique as the businesses people run from their homes, but what is true for all is that having the right insurance gives you the peace of mind to provide the services and products your clients need.
Contact us with any questions you may have about commercial insurance!