Working from a home office or operating a business from your home can be a great way to earn extra income, not to mention the intangible benefits of having less stress, no commute, and additional family time. But it is important to remember that the home business is just that—a business. And it needs to be insured like any other business, because homeowner policies don’t typically cover business activities.
Here are some key items to consider. Will your business supply or manufacture a product? Will you have electronic equipment? What products, services, or professional advice will you offer? Will you have business visitors to your home? Focusing on these questions will help identify what types of coverage you need.
In most instances, your home business will need business property insurance against loss or damage to property used in the business. If a fire occurs and your home office is destroyed, your computer, fax machine, copier, furniture, and printer would not be covered under your homeowners’ policy.
Liability insurance protects the business when it is liable for damages caused to another or another’s property. This type of insurance is necessary if business visitors will come to the house. Your homeowners’ policy will not protect you from claims made by injured business visitors. If a courier slips and falls on your front steps while making a business delivery, you could be found liable for their injury.
Professionals who work from their home need the same professional liability insurance as professionals working out of an office. As straightforward as this may sound, many professionals do not secure professional liability insurance when they work out of their home. Avoid any gaps in coverage. For example, if you are transitioning from a paid position to an in-home business and your prior employer provided professional liability coverage, do your best to secure coverage that will be in place the moment the prior coverage lapses.
Product liability coverage protects the business if it is liable for damages to a person or property caused by a product supplied, designed, or manufactured by the company.
Your home business must also comply with all regulations, health codes, laws, regulations, and statutes. A failure to do so may void your coverage. Employment laws must be followed, too. If you have employees, you will need workers compensation coverage.
Regardless if your home business is your main source of income or supplementary, many of the same risks apply. Please contact an insurance specialist to find out more about the many home-based business insurance options that are available.
