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Protect your home-based business by knowing the coverage options

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A few years ago, my dad started his own archery business from his and my mom's garage. He loves hunting and has a passion for helping others improve his hunting experience, whether it is to buy a new bow, fix a broken one, make custom arrows or give lessons to children and new hunters. One of the things he did before he started his business was to make sure it was properly insured. This is very important for anyone who wants to start a new home-based business!

Why? Because there are many cases where a home-based insurance policy can save you from financial loss. Here are some of the questions my dad asked and talked to his independent agent at the beginning of his quest.

  • Will goods be stored in my home?
  • Will I have office equipment?
  • Will there be customers on my property? What if a customer slipped on a wet floor or icy pavement?
  • Do I sell a product? What if a customer is harmed by any of these products?
  • Do I provide a service? What if a customer is not satisfied with my work? Or did I miss a requested deadline?

If you can answer yes to any of these questions as well, you may need business insurance. According to an online Trusted Choice article, "a business insurance policy can protect you from potential claims and loss of responsibility or damage to your goods and equipment. Because there are so many different types of home-based businesses, the protection you need comes from a number of different policies." 19659011] Here are some types of policies available:

  1. Your Homeowners Policy. The typical homeowner policy does not provide coverage for a customer who is damaged on your property and can only provide limited coverage up to a specific liability limit for damage to goods or office equipment For smaller home-based businesses, you may be able to add a support for your current coverage policy. Depending on the scope of your business, you may need a separate policy to provide adequate coverage.
  2. A home business policy. This type of policy is for medium-sized companies ($ 2,500- $ 10,000 in assets), providing both property coverage and liability. liability insurance? It can provide coverage if a customer is damaged by a product or slides and falls on your driveway or porch. Liability insurance can also provide a defense if a customer suits you for certain things, such as missing a deadline.
  3. A commercial insurance policy. This type of policy is for larger home-based companies that have a lot of goods and / or equipment and need more and different types of liability insurance.

If you are thinking about starting a home based business, talk to your local independent agent like my dad did. They can help you decide on the policy that is right for your new business. My dad has the peace of mind he needs to successfully protect himself, his customers and his business.

Source: https://www.trustedchoice.com/small-business-insurance/coverage-types/home-business [19659011] The above information is of a general nature and your policy and coverage provided may differ from the stated examples. Read your policy in full to determine your available coverage.

Copyright © 2020 Central Mutual Insurance Company. All rights reserved.

Blog originally published April 16, 2019.

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