Courtesy of iii.org
Whether you’re running a part-time, seasonal or full-time business from your home, you’ll want to carefully consider your risks and insurance needs. Starting a business—even at home—can be a challenging venture, and having the right insurance can provide a financial safety net and peace of mind.
Your insurance choices should, in part, be based on the type of business you operate. For instance, if you’re a sole practitioner home-based accountant, you’ll have very different insurance needs than your neighbor who runs a childcare business. When considering insurance for your business, here are some questions to ask yourself:
- What type of business do I run? What are the potential risks faced by your type of business?
- What is the value of my business property? Do you have expensive equipment, such as cameras or commercial printers? Do you stock valuable business inventory, such as gemstones?
- Does my business have employees?
- Do customers or contractors visit my business at my home?
- Do I use my car or other vehicles in the course of my business operations?
- Does my business store customers’ financial and personal information on a computer or through a cloud computing service?
Property and liability insurance
Depending on the nature of your home-based business, you’ll need insurance to protect the value of your business property from loss due to theft, fire or other insured perils. You’ll also need liability protection to cover costs if someone is injured as a result of visiting your business or using your product or service. Your homeowners insurance may provide some protection for your business, but it may not be sufficient. Options for property and liability insurance for home-based businesses include:- Adding an “endorsement” to your homeowners policy
- Stand-alone home-based business insurance policies
- A Business Owners Policy—or BOP—which combines several types of coverage