Is Business Insurance Required for Your Home-Based Business?

If you're one of the increasing number of business owners with a home office, you may have considered purchasing business insurance. But choosing what kind of insurance to get is just as important as deciding whether or not to obtain insurance.

Today, many prosperous business people run their modest firms from the convenience of their homes. However, just because you can manage your firm while donning fuzzy slippers doesn't imply it isn't a legitimate enterprise. As a result, it requires insurance just like any other physical business.

Small business owners must understand that neither renters' nor homeowners' insurance policies cover operations conducted from homes. Therefore, it is advisable to engage with an insurance expert who can give you more information on the different types of home-based business insurance that are available for your business if you operate a business out of your home.

Business Property Insurance: If any equipment is used, such as a computer, fax machine, printer, furniture, etc., to run your home-based business, you need to obtain business property insurance to protect your assets against loss or damage. That's because business equipment losses due to fire or flooding are often not covered by your homeowners' policy. Instead, you would require commercial property insurance.

Liability Insurance: Liability insurance is required if customers or other visitors come to your home for business-related reasons. With liability insurance, you and your company are shielded from being held responsible for the harm done to someone else's person or property. Once more, your homeowners' coverage won't defend you against lawsuits filed by clients who may have been hurt at your home-based business. For instance, liability insurance is what you'll need to be covered if someone makes a commercial delivery to your house slips and falls. Homeowners insurance won't do.

Professional Liability (Acts Coverage) - In the same way that professionals working from their houses need professional liability insurance, so do professionals working within their homes. Professional liability insurance can shield you from any carelessness or failure to fulfill claims made by your clients if you're a consultant or employed professional (or patient).

Product Liability Coverage: If your company manufactures or distributes goods, ask your insurance agent about product liability coverage, which guards against losses to people or property brought on by a product you created, produced, or distributed.

So, do you need insurance for your home-based business? Given the wide range of potential business liabilities, you're probably better off having at least a few policies in place, depending on your business needs. And even if it's in your home office, that might be one less thing to keep you up at night.