Do I need business insurance for a part time business with an office at home?
In this economy, working from home can be a great way to supplement your income or start a new business. A home office has a great many benefits such as saving gas and time on commutes, having the flexibility to be home for kids and the family, and being able to start a new business venture with little overhead.
The key point however, is that it is business which is being conducted. Like any other business, it needs to be insured. Many entrepreneurs make the mistake of thinking their business and office is covered with homeowners insurance. Most homeowners policies have very limited coverage (often, a $1,000 limit) on furnishing, computer equipment, and business equipment.
Many folks that utilize a home office and/or work out of their homes make the unfortunate assumption that their homeowner’s or renter’s policy will cover any losses. Those policies don’t cover businesses. Personal auto policies generally do not cover your auto when being used primarily for business purposes.
In addition, many policies have exclusion provisions for ‘illegal’ acts which could include ‘business being conducted in a residential area’ so it’s important to check your town’s specific ordinances and business permitting. Are your customers coming to your home to transact business? Your homeowner’s policy would not cover liability in the event that a customer was injured in some way on your property if it is for a business purpose.
This is a terrible risk to expose yourself, your family, and your home to. You may need a General Liability policy for your business, or a Business Owners Policy, for example. Premiums for these policies are usually not that high for small businesses. If a claim were to occur, such a policy could save your business and you a lot of money and headaches.
If you’re starting our running a business from your home, it’s important to meet and review with your licensed insurance professional how your business operates and conducts business. That way, together you can determine the right coverage for your home based business.
Normally, there will be a liability and property policy needed as well as worker’s compensation. Often, your insurance professional can combine the liability and property coverage into a business owner’s policy.
Don’t risk your home and assets on assumptions. If you have a business, you have risk. If you’re starting out at home, it’s a big risk. Talk to your licensed insurance professional and learn what is needed to protect your business, no matter how small or large.