Home business insurance is vital, which is why you have to protect yourself and your business as well. Thus, there are lots of factors to consider when setting up an office at home. Those factors include whether you work at home for a company or have your own business.
Further, it depends on your arrangements with your employer if you choose to work at home. Either way, your employer is completely or partially responsible for any possible risk. So, it’s important before you come to an arrangement that you clarify the responsibilities for the parties involved.
You are responsible to ensure that you have adequate insurance coverage if you plan on running your own business from home.
Find below different types of home business insurance for business operators to consider:
- Professional indemnity
- Public liability
- Income protection or personal accident
- Worker’s compensation
- Inventory – if you keep stock on hand or stored
- Office equipment
Most operators of small or micro businesses may feel they don’t need additional home business insurance, if any.
Anyhow, imagine this…
During a serious storm, your home got struck by lightning. That damaged all the electrical equipment in your home. Moreover, your house contents policy will only take responsibility to replace electrical appliances destroyed in your home due to the lightning.
But, they won’t take responsibility for equipment used in running your business. Although, some organizations do offer limited cover for home office equipment. At any rate, you may require home business insurance if you want protection from such possibilities.
For instance, do you meet with your clients at your home office? If yes, do not expect any form of coverage by the public liability section of your household policy if a client gets injured from tripping on one of the toys belonging to your children. In fact, you are totally responsible for any liability that may occur due to your business activities.
Consider the impact of real possibilities if you lack home business insurance
Furthermore, use a minute to reflect on this. Consider, loss of income as a result of incapacity, medical expenses, legal expenses. This is if the matter is taken to court, as well as judgement from the court. Granted, the claim is enough to drag you down financially if you don’t have home business insurance for your business.
Also, remember that your household policy does not cover for inventory on your premises. You need a different home business insurance policy to cover your stock. And, if you don’t handle stock, your expertise and talent – like a financial advisor or consultant – may be your product.
What if your recommendation is proven to be inaccurate? A client may sue a financial advisor for loss if the clients lose plenty of money from following his/her advice. That’s the end of another business if there is no home business insurance.
Another relevant question to ask yourself is this. How will your current lifestyle be affected if you lose your home-based business income? Your answer is not friendly or catastrophic. Then, it’s advisable you go for some sort of personal accident insurance or income protection.
Worker’s compensation facts
Besides, there is also worker’s compensation. You may feel this is irrelevant since you don’t have anyone working under you. Think of this…
You are a graphic designer, and you are very busy. Client’s demand for your service has increased to an extent that you sometimes outsource some of your work to another graphic designer.
Therefore, you contacted a graphic designer you have worked with before on one particular occasion. The both of you meet at your favorite café to discuss the job specifications. The meeting was successful and you are expecting to receive the job at an agreed time. As for this, he can’t wait to deliver your job and receive payment.
However, the graphic designer you outsourced the project to was involved in an accident on his way home after meeting with you and sustained serious injuries. He was not able to work for nearly two months and he has no Personal Accident Insurance. His vehicle was the only one involved in the accident. Thus, no recourse.
Example of liability
The only option he has to put his life in some sort of order is to ask for worker’s compensation from you. It would be difficult to refute his claim since he got involved in an accident on his way home after meeting with you – and you offered payment to receive his service.
Have at the back of your mind that the injured party also suffers loss besides the business operator who does not have home business insurance. Even if the court awards judgement in favor of the injured party, the business operator who is now bankrupt would not be able to make such payments.
In any case, it is important you get the right home business insurance to cover any potential risk. This is regardless of the type of business you run from the comfort of your home. From the illustrations mentioned above, all it takes is one single incident. One that may give rise to a claim that will drag your business down, and also affect your life.
Assess your possible needs and talk to an insurance agent. Cover your bases with your individual home business insurance requirements. Doing this will save your business from any financial pitfalls in case something unforeseen happens.