Reinventing yourself completely over the past few years may have seen you launch a part-time e-commerce venture, or perhaps meet with clients in the comfort of your home to discuss business. As you pursue this attractive and convenient venture, finding the right insurance coverage to protect you will be crucial. There are some forms of coverage available with an additional endorsement to your homeowners’ insurance policy, but the traditional standalone in-home business policy offers higher limits and a wider range of coverage.
Do I Need Home-Based Business Insurance?
The last few years have seen many more people now working from home for convenience and seeing a massive boost of productivity. If you see frequent deliveries to the house or invite clients inside the home, home-based business insurance becomes even more important. If an injury happens while someone is visiting your home, being liable for their medical bills would quickly become an issue if you weren’t sufficiently covered.
Even if face-to-face interaction is not a component of your daily business, you may require professional liability insurance if you are actively shipping products out to consumers. Both types of coverage offer you protection from lawsuits that could stem from liability issues.
What Are the Different Types of Home-Based Business Coverage?
Home-based business insurance is a group of coverages that are ideal for those operating out of their homes. Depending on your type of business, you may need to explore the options below. Some insurance companies will offer their policies in bundles, which include different coverages depending on which company you choose. Following are the common types of home-based business insurance policies and what they cover.
General Liability Insurance:
A commercial general liability policy will help to cover legal fees and judgments if your business undergoes a lawsuit. This could arise from causing physical harm or an advertising mistake, such as infringing on a copyright. It will also cover medical bills for non-employees injured on your premises or during operation duties. This form of coverage also covers product liability and is a firm requirement for all businesses that manufacture products for consumer use.
Business Personal Property Insurance:
Business property insurance will pay to fix or replace equipment that is stolen or damaged, inventory, furniture, technology, or important documents after a covered incident. If you have a fire in your home or a burglary, your business property policy will pay to repair or replace it. A standard homeowners policy will come with $2,500 in coverage for business equipment, which may not be adequate to cover the property needed for smooth operation.
Business Interruption Insurance:
Business Interruption Insurance is sometimes known as business income insurance, and is often included with a business owner’s policy. This vital form of coverage will help replace your lost net income if you cannot operate after an unfortunate break-in or fire.
Business Owner’s Policy:
A business owner’s policy is a combination of commercial property insurance, business interruption insurance, and general liability insurance all in one package. You are also able to customize this type of coverage with specific endorsements that will help your category of business. For some business owners who complete all their work entirely from the home, they might not find this type of commercial property coverage necessary.
Commercial Auto Insurance:
This is not just essential for delivery businesses, but for any entity that uses their vehicle for business use. Some businesses have employees that only may drive a few times a week or month, and others have a daily regimen that calls for a driver that is less “on the spot.” Hired and non-owned auto insurance can be a great solution for those who make deliveries in their car, as a personal auto insurance policy may not cover you if an accident occurs.
Worker’s Compensation Insurance
In most states, businesses with a certain number of employees are required to carry coverage for workers’ compensation. It pays for medical bills and lost wages if an employee is injured at your business, or if something happens to them during a shift. Businesses such as tree trimming and construction are what most people think of first for this type of coverage, but even retail stores and offices can have accidents. This type of coverage will pay for bills and lost wages after an employee is injured, and current times have also dictated the coverage for illnesses and diseases employees may incur while working.
These types of policies may pay to recover electronic data that has been lost, but numerous other types of risks may not be covered. Running a successful business sees you dealing with many types of sensitive data that criminals would love to get their hands on. A cyber liability policy will cover lost or corrupt data, cyber extortion, identity theft, and reputation recovery, in addition to interruption coverage for the time you are down after the incident.
How Much Will Home-Based Business Insurance Cost?
The cost to insure your home business will depend on factors such as the different risks you face during daily operations and the types of coverage that you ultimately purchase. If your business is deemed low risk, you could secure a general liability policy for as little as $11.00 per month, and professional liability insurance begins at around $20 per month. Many different plans in motion unfortunately can create risk, and so businesses that have commercial auto and worker’s compensation could encounter significantly higher costs.
All of us here at Alexander Insurance understand that your business is an extension of your aspirations and lifetime’s work! We are standing by to assist you with the planning for protection of your livelihood, and can’t wait to be diligently by your side during the sometimes daunting journey!