When you work from the comfort of your home, having small business insurance may seem unnecessary, especially if you do not have employees or if the type of company you operate seems risk-free. But home-based business insurance is important.
There are plenty of worst-case scenarios that could arise, which means a business insurance policy is a necessary safety net. If you think your renter’s or homeowner’s insurance would cover every claim related to your home-based business, think again. It may be time to contact your insurance broker for additional coverage options.
Here’s a look at the home-based business insurance coverages you may need:
General liability insurance
If a client comes to your home, slips, and falls on your living room floor, you need protection. You also need coverage if someone takes legal action against you with a claim of copyright infringement or if a competitor views your advertising as slander.
Commercial property insurance
High-dollar inventory or expensive computer equipment needs additional coverage in the event of theft or damage that’s not your fault. And if you have employees who provide a service at a client’s residence and property is damaged, you could be held liable for replacement costs.
Errors and omission insurance
While this may be included in malpractice insurance (if required by your profession), other jobs, such as business consulting, may need coverage in the event that you give advice that is considered incomplete or wrong and your client claims to have been harmed and suffered damages.
Business interruption insurance
If a fire, flood or other disaster occurs and interrupts your business operations temporarily, you may need coverage as compensation for lost revenues.
Workers’ compensation insurance
This type of insurance is important, even if you’re not required to carry it under state law. You could be held liable for an employee’s slip-and-fall injury, for example, even if you’re not at fault. Without workers comp insurance, you could be put in an unfortunate position of having to cover an employee’s medical costs and lost wages.
Product liability insurance
If you’re an entrepreneur and you operate your business from a home office, you may need coverage if your product doesn’t perform as expected and you suffer a loss.
Some of these types of insurance need to be purchased separately while others can be bundled together, depending on your needs. Others can be added to your homeowner’s policy. However, it’s important to know that your homeowner’s policy could be negatively affected, and even voided, by your home-based business activities.
That’s why it’s crucial to learn more about insuring your business so that you’ll be protected if you’re faced with legal actions. Get the right type of home-based business insurance by contacting Brashears Insurance today.