If you have any kind of home-based business, you might think that your home insurance has you covered. Not so fast, you may want to think twice about that and double-check with your provider. A regular home insurance policy doesn’t usually cover your home-based business, and it’s definitely different than business insurance. We’ve put together some helpful information about the differences between home insurance versus home-based business insurance. These tips could really save you a bundle if something goes wrong at home.
Belongings are Covered with Regular Policies
A big part of a traditional home insurance or tenant insurance policy is the section of your plan that protects your personal belongings. This usually covers things like clothes, furniture, appliances, electronics, etc… It may even cover a computer, a desk, or something like a printer for regular home use. However, a generic home insurance policy will usually not cover extra business property stored in your house like special business equipment, merchandise, or machinery. Also, a regular home or tenant insurance policy will not have coverage for any liability related to your home-based business; this is a serious area that needs your attention. If someone injures themselves helping you with your business, you are likely not covered and that could get very expensive for you.
Don’t Lose Everything You’ve Built
It might surprise you to hear that a large percentage of small businesses won’t survive a disaster or an accident from which the business is deemed liable. Don’t assume that your regular insurance will protect you from these unforeseen incidents. The last thing you want to do is forget to mention your new venture to your insurance broker, then injure yourself (or a business partner) and discover that you’re on the hook for everything. This would include all the medical bills and litigation, should the person choose to sue you. Things can get nasty in a hurry, so please let us know if you’re starting a home-business. We want you to be successful and protected.
Get Home-Based Coverage as an Add-On
If you run your primary business out of your home and have special equipment, products or merchandise that you only use for that business, you will certainly want to consider additional coverage for these items. Like, call your insurance broker right away! This is also the case for anyone who has a home-based business and wants additional liability coverage related to the business operations.
One option to get this extra coverage is adding additional home-based business insurance coverage into an already existing home or tenant insurance policy. This is usually a low-cost option to have at least some coverage for business property and some coverage for liability from the home-based business activities.
These are a few of the most common Add-On coverages.
- Commercial Property Insurance – This will help replace any specialized equipment that might get damaged in a fire, earthquake or vandalized.
- Business Interruption Insurance – In serious cases of equipment failure you can recover lost income due to the business being shut down while repairs are made or new equipment is acquired.
- Commercial General Liability Insurance – This is a significant piece of the liability puzzle as this can cost you your entire business if it’s serious enough. If you are found legally liable for someone injuring themselves at your property, or even while you’re completing a job at a clients house, you could face very serious legal challenges. If you’re not covered by commercial general liability, that could spell the end of the business. Bankruptcy might be the only way out. This is the biggest risk area for any business, so look at this add-on as the most important additional coverage.
- Professional Liability Insurance – Everyone’s human, we all make mistakes. Sometimes there are environmental or technical glitches that cause us to miss deadlines or fail to meet some contractual agreements. Protect yourself from getting sued by clients with professional liability coverage.
Get a Separate Business Insurance Policy
A separate business insurance policy is a good option for any business owner who wants even more coverage beyond just basic business property and liability protection. A more comprehensive business insurance policy will cover these items (to a greater extent), but will also provide coverage for other things like privacy breaches, losses from disruptions to business activities, and more.
Consult With One Of Our Business Insurance Brokers Today.
If you want to discuss additional insurance options for your business, we encourage you to contact us to speak to one of our dedicated brokers. It’s important to keep your insurance company in the loop if you have a home-based business. We’d be happy to answer any questions you may have and help you find the right business coverage that properly protects you and your business.