I Run My Business In My Home. Do I Need To Carry Business Insurance?

Sep 22, 2020 | Business Insurance

Home Business Insurance

As long as risks in the enterprise you are approaching exist, getting insurance to cover them shouldn’t be questioned. Opening a business is a gamble, or at least it might feel like one, with the excellent success and the risks of getting there. Now, we will discuss home business insurance.

Twice the Risks, Twice the Need

A home-based business exposes the owner’s place of business to two times more susceptibilities than it could have been riddled with before. There is an option to customize your business insurance quotes or even avail of other complete insurance policy groups that can act as an umbrella and include almost everything you’ll have to cover.

What Should You Consider Before Getting Home Business Insurance

Business Property

  • Equipment you use to run your business
  • The vehicle you use for your business
  • Stock/ Inventory
  • Your place of operations (as well as your home)
  • *Or any properties you use to operate your home-run business

Business products

  • Products you sell in your business
  • The services your business offers
  • Whether Products or services are tangible or not

Hired Help

  • Employees
  • Type of employment they have with you

Personal Property

  • Your home
  • Your home equipment that’s not for commercial use
  • Or any personal properties that might be affected once you run your home business

Why Insure your business properties?

  • Future damages (Specifically, equipment break-down coverage)
  • Repairing/ replacement costs in the future
  • Utility services’ failure, as well as damage

Insurance Coverage Your Small Business May Need

These are just a few risks you’ll have to prepare for. How, then, can we insure against the aforementioned?

Commercial General Liability Insurance

First, we must understand that liability insurance or third-party insurance will cover the insured against claims of injuries and damage to people and/or property. It will cover legal costs and payouts for which the insured can be legally responsible.

This is a must-have, but one insurance plan does not cover all. 

You must be more specific if you plan to insure a home-run business. Commercial General Liability Insurance, as it is general, will probably not include the fine-tuned necessities the diversity in the enterprise would require. You, therefore, will need the following:

Commercial Property Insurance

Whereas your business properties will be covered in case of the need for repair for damages, as well as funding for the high costs, including:

  • Your home (Since it will technically be a commercial place or your place of operations)
  • Your equipment
  • Your inventory items

Commercial Property Insurance will cover you in case your commercial property needs financial backing, including the possible damage and repair costs that, without the insurance, would’ve been a nightmare for both you and your finances.

Commercial Auto Insurance

You’ll need this when your home-based business includes a vehicle in its operating tools.  Commercial Auto Insurance is more inclined to protect you against high costs regarding your commercial vehicle. Even if you are home-based, when using a vehicle, ensure you are covered for all the risks it might pose. Of course, insurance should also cover your enterprise’s merchandise or products. Number two on the things you need to run a home-based business, there is the enterprise products, which are the following:

Business Liability Insurance

This ensures possible lawsuits regarding four scenarios in liabilities, which include business, professional, and public or personal liabilities.  Any costs for customer compensation, among others, will be covered by this insurance.

Errors and Omissions Insurance

Having Errors and Omissions Insurance coverage is like getting a risk management plan that big businesses usually have, which, unfortunately, many small, home-based business owners don’t have. If an employee commits a mistake in their service (such as negligent acts or errors during business) and the client files a complaint or a lawsuit, your expenses for such will be insured.

Cyber Liability Insurance

With many small businesses shifting to digital platforms, collecting data from customers is necessary. Data that is quite sensitive, such as names, addresses, phone numbers, and banking information, of which are susceptible to cyber-attack. This is where Cyber Liability Insurance comes in. So if you have a business like a resto, clinic, consultant or online coach, SaaS start-up, or offer vacation rental decor subscription service, you need this coverage.

Worker’s Compensation

Worker’s Compensation is often mandatory for companies hiring employees. This insurance type covers the following: Medical costs for injuries sustained at work; Funeral expenses in case a worker is killed on the job; Death benefits for the deceased’s immediate family; and Employees’ lawsuits for injury. This avoids filing lawsuits to answer to and assures that your employees have appropriate healthcare should anything happen to them while at work.

Personal Property Insurance

If you have personal property insurance, there would be no problem in filing claims and financing the repairs. Homeowner’s business insurance policies aren’t always stretched out far enough to include business property damages into their coverage. Business insurance policies typically don’t include personal property damage, especially in-home business circumstances.

Personal Auto Insurance

Personal Auto Insurance usually covers when your car is damaged during personal use. Commercial Auto Insurance is for when you’re using it for business purposes.

Home Insurance

Home Insurance covers any areas your Commercial Property Insurance might not cover, including any of your properties. Let’s say your stove in the private sections of your house has burned out. Certainly, Commercial Properties Insurance cannot cover that because the damages weren’t to the parts of your home you have reserved for your commercial, home-based business use. Home Insurance is precisely for those situations.

Renter’s Insurance

This is what you will need if you are renting your home. Much like Home Insurance, this will protect all your personal properties when needed. Any Renter’s Insurance will typically cover almost all your personal properties if it needs repairs or replacement costs.

Insurance for a Second Home or Vacation Rental

More and more people have been turning their vacation homes into vacation rentals. Some even take up mortgages for a second home to start their AirBnb or VRBO rental. With this new passive income market rising and growing, it is no surprise that many want to take advantage. Still, you need to make sure that you protect your investment.

In Conclusion

Should you acquire home-business insurance? Definitely! Insure your own and corporate properties since we never know when trouble will strike. Safety first!

These insurances are flexible and can be tailored to your business’s needs. Then what? Start protecting yourself and your business immediately by contacting Team AIS in Denver, CO!

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