With permission from iii.org
Whether you run a part-time, seasonal or full-time job from your home, you want to carefully consider your risks and insurance needs. Starting a business – even at home – can be a challenging business, and having the right insurance can provide a financial safety net and peace of mind.
Your insurance choices should be based in part on the type of business you run. . For example, if you are a sole practitioner as a home based accountant, you have completely different insurance needs than your neighbor who runs a child care company. When considering insurance for your business, here are some questions to ask yourself:
- What type of business do I run? What are the potential risks of your type of business?
- What is the value of my business? Do you have expensive equipment, such as cameras or commercial printers? Do you stock valuable business inventory, such as gemstones?
- Does my company have employees?
- Do customers or entrepreneurs visit my company in my home?
- Do I use my car or other vehicle during my business?
- Does my business store customers' financial and personal information on a computer or via a cloud service?
The answers to these questions will guide what types of insurance you buy ̵
Property and Liability Insurance
Depending on the nature of your home-based business, you need insurance to protect the value of your business property from loss due to theft, fire or other insured hazards. You also need liability protection to cover costs if someone is injured as a result of you visiting your company or using your product or service. Your homeowners insurance may provide some protection for your business, but it may not be enough. Options for property and liability insurance for home-based businesses include:
- Adding an "approval" to your homeowners policy
- Independent home-based business insurances
- A business owner policy – or BOP – that combines several types of coverage
Corporate insurance12 ] Your personal car insurance can provide coverage for limited business use of your car. But if your company owns vehicles or if your personal vehicle is mainly used for business purposes, you need insurance for company vehicles.
Workers' Compensation Insurance
If you have employees, you would strongly consider buying employee compensation to cover costs if an employee is injured at work. Work compensation insurance provides compensation for salaries and medical benefits to employees who are injured during employment, in exchange for waiving the right to sue the employer. In some states, workers 'compensation insurance is mandatory, so be sure to check the state's workers' compensation website for local claims.
Other types of insurance may also be suitable for your home business. Your insurance staff can help you evaluate your needs and choose insurance to meet your budget.