Do I Need Home-Based Business Insurance?
There’s been a huge increase in the number of home-based businesses in recent years with the rise of digital opportunities plus the chaos of the coronavirus pandemic prompting millions of Americans to become entrepreneurs right from the comfort of their own homes. Indeed, according to the U.S Small Business Association, some 50% of small businesses start in the home.
And while there’s a lot of potential for success when you’re running a business from home, it’s also important to be aware of the risks posed by home-based operations — and to take sufficient measures to combat those threats.
In this blog, we’ll run through everything you need to know about home-based business insurance, including what it is, why it’s essential, and general tips for buying the right policy.
What is Home-Based Business Insurance?
All businesses need insurance to protect themselves against business-related injuries, accidents, damage, and lawsuits. Home-based business insurance is a specific policy type that is tailor-made for business owners who primarily run their operations from their properties rather than from traditional brick-and-mortar commercial premises.
Homeowners have home insurance. But it’s important to be aware that your homeowner policy is unlikely to cover your business operations, at least not to the extent that you need. For instance, a home insurance policy usually only pays out up to $2,500 for business-related incidents. If the cost of the incident exceeds that amount, then you’d need to make up the rest out of pocket.
Why It’s Important
If a “traditional” business doesn’t have insurance in place to protect itself from lawsuits and other unwanted expenses, it takes a huge risk. And while home-based businesses typically experience less risk than these more established businesses, their risk factors are still very real.
If owners don’t take sufficient steps to protect themselves, they could be liable to pay claims out of pocket, which could have a negative impact on the company’s bottom line. Indeed, it could be so damaging that the business has to cease trading.
Your homeowner policy will offer some coverage protection, but only a limited amount. If you run your business from a standalone structure on your property like a custom-made office shed in your yard, your home insurance coverage will not offer any protection. Plus, personal items that are used for business purposes away from your property will only be covered to the tune of $500 which is usually not enough for most business owners.
What Good Home-Based Business Insurance Covers
Not all home-based business insurance policies are created equal. As with all things, there are better and worse levels of coverage. If you’re looking for home-based business insurance that offers the highest level of protection, look for one that includes the following:
- Loss of business income
- Personal property coverage
- Equipment breakdown
- Off-premises coverage
- $1 million liability coverage and $100,000 business coverage
How To Figure Out Whether You Need Home-Based Business Insurance
There are a million and one things you’ll need to take care of when you’re running a business. You may find that getting the right insurance policy just isn’t a priority for you right now. But just in case, let’s take a quick look at a few quick ways you can determine whether you need home-based business insurance today by asking the following questions:
- What risks does my business face?
- Do other people (clients, etc.) visit my business premises?
- Do I use technology that holds sensitive data such as client information?
- Do I work from an external structure on my property such as a garage?
It’s usually a good idea for even the most straightforward business operation to have home-based insurance coverage given the negative consequences that can occur if there is no policy in place. So if you have any doubts, speak to a professional today.
Tips for Buying Insurance
Are you in the market for home-based business insurance? Follow these tips to ensure you get the best options to fit your needs.
Don’t Delay
As a business owner, you already have plenty of things on your plate, and insurance may not be at the top of your priority list. But it’s one of those things that you’ll want to have before you need it. So don’t delay — get insured today.
Don’t Assume
Many home-based business owners assume their home insurance will offer adequate protection. Unfortunately, that just isn’t the case most of the time. Your home insurance policy will only offer some protection, and what it does cover is generally not enough to provide you with peace of mind.
Make sure you carefully read your home insurance policy, and take action if your coverage is inadequate.
Make Sure You Have Adequate Coverage
Not all home-based business insurance policies are the same. Before you invest in one, it’s important to think about what coverage options you need and which price point is going to ensure you get the appropriate corresponding policy.
Work With a Reputable Company
Your insurance policy could prove to be more hassle than it’s worth if you don’t work with a reputable company. So do your research, and be sure to work with a company that has plenty of expertise and experience.
Home-Based Business Insurance: Your Key to Peace of Mind
You never know what’s going to happen when you’re running a business. And while you should hope for the best, it’s always a good idea to prepare for the worst. By investing in home-based business insurance, you’ll have the peace of mind that comes with knowing if something goes wrong, there’s a safety net waiting to catch you.
Final Thoughts
Nobody wants accidents, injuries, or thefts to happen. But unfortunately, they’re always a possibility.
To ensure that your business is protected, consider taking out home-based business insurance with Anderson Insurance Agency. We’ve been serving New Jersey since 1967 and have developed a solid reputation for delivering the best price, coverage, and service to our clients.
To get started, simply give us a call at 609-597-8507.