There’s no doubt that establishing a home business presents huge benefits and countless returns. Apart from being a hassle-free opportunity to earn or supplement your family income, working from home brings about other benefits such as independence, more time for kids, family and so on. Nevertheless, the bottom line is that a home based business is not different from any other and it equally requires to be insured.
Indeed, a home based business has similar frameworks and parallel concerns with other types of business. All businesses, be they large corporations, partnerships or those owned by individuals are faced with the same liabilities and other unforeseen crisis and that’s why insuring a home run business should not be overlooked.
One of the most common misconceptions home business owners have is that their homeowners’ and renters’ policies would also be sufficient to cover their businesses. The truth is that a home insurance doesn’t include coverage for a home run business or even business property such as your computer and other office equipment. Similarly, personal auto policies are not meant to cover autos you use to run your business.
If you run a home based business and you want to be on the safe side, it’s important that you inquire from your insurance provider on the policy that applies to your business operations. This is because there are many business operations that are categorized as “illegal” and may not be eligible for insurance coverage. Let your insurance manager know all your current business operations and those you intend to introduce in the future. They may want to know whether you’ll be manufacturing and supplying products or foodstuff and so on. Discuss with them if you intend to use your personal vehicle for business purposes.
Here are different types of insurance coverage that you’d need for your home based business.
Liability Coverage
This is the type of insurance that covers your business against liability for damages caused to someone else or their property. Should a visitor to your home office, such as a courier or a delivery person gets injured, they would be covered by liability insurance and not your homeowners’ policy.
Business Auto Coverage
Since your personal auto doesn’t apply to covering your vehicle when being used for business purposes, you will require business auto coverage. You don’t want to get into trouble in case you’re involved in an accident when visiting a client or making a delivery using your car.
Product Liability Cover
Product liability covers your business against liability incase a product manufactured or supplied by your company causes damages to another person or their property.
Business Property Coverage
This is the type of insurance that covers your business equipment such as computers, printers etc against damage such as fires or other forms or destructions.
Other Considerations:-
Insurance cost
The major factor that determines the cost of your home based business insurance is they type of the company you run. For a basic policy that covers, say loss of computer data and a few other liabilities it may cost you between $300 and $500 per year.
Calculation factors
Some of the factors that determine the cost of your insurance premium include the type of your business, how long it’s been in existence, your credit history and home location. Enhance your home security through having in place a security system, installing fire alarm and so on.