Do you need insurance if you are running a business from where you live? It is definitely something you want to consider. This article will explain the different types of business insurance and why you would need it in the first place.
For a small business owner, not buying insurance can be a costly mistake. In addition, having regular business insurance is not the same as home business insurance. If the business owner does not inform their provider that they are working from home, the policy might be invalid. What is more, standard home insurance might not cover business operations. Therefore, missing stock from your home or garage won’t be covered. Neither will an accident sustained by a customer in your home.
This is where home business insurance can prove critical. Typically, providers offer flexible insurance packages. Therefore, a business owner can choose the type that is suitable for their sector, type of business, and level of cover needed.
Types of Coverage
The main type of coverage is general liability insurance. Your homeowner’s policy will not cover injuries sustained by clients on your premises, but general liability insurance will.
You need business contents insurance in addition to home insurance because the latter will not cover loss or damage to equipment. Most homeowner’s policies have a limit that claims for expensive equipment, such as laptops, mobile phones, tablets, and printers will exceed easily. However, business contents insurance also covers the cost of stolen equipment.
Homeowner’s policies only cover business equipment when it is on your premises. Therefore, if you use your mobile device or laptop outside your home, separate insurance will be required.
Do you use your car for business purposes? In that case, it should be insured to cover liabilities and damage if you have an accident.
Professional Liability Insurance
If you provide some kind of services from home, you need liability insurance. Professional liability insurance protects your clients and yourself. For example, it will protect your personal assets if a client asserts damages. It will also help cover your defense costs. This coverage will compensate a client who has suffered losses.
Malpractice insurance isn’t only for medical and health care service providers. This kind of coverage protects customers from any damages caused by wrong or unsuitable treatment. Even hairdressers have benefited from malpractice insurance.
Business interruption insurance will cover your lost revenue if you need to terminate operation due to a natural disaster, such as a flood, a storm, or a fire.
Consider product liability insurance if your home business involves selling goods. If your goods fail to perform, this type of insurance will protect you from liabilities.
Errors and Omissions
Errors and omissions insurance is suitable for home businesses that provide professional consultations. These policies will cover damages to clients who claim to have suffered because your advice was incomplete or inadequate. In addition, they will also cover your defense costs.
Completed Operations Coverage
You will need this type of coverage if your home business provides services at the customer’s site. It will protect you from liability that could emerge after you’ve left the site. It also covers any project you were currently working on when damage or injury occurred.
As with every type of business, a home-based business can benefit from disability insurance. If you run a company from home, you depend on it as a source of income. This insurance will cover lost revenue if you temporarily cannot work due to disability.
Of course, you don’t need all these types of insurance for your home business because the premiums will eat into your bottom line. However, you should examine this list and decide what type of insurance you would need the most.