Are You Running A Home Based Business? If So, Then Insure It Accordingly!
Are you earning money by providing online services, walking people’s dogs or giving dance lessons online? Well, the thing is that if you’re working from the comfort of your own home (part time or full time), then you may want to think about insuring your business.
Unfortunately, only few people do take this step and that’s why only 60% of the more than twenty eight million businesses in the United States are currently insured, says the Small Business Administration. So why are there so many business owners that don’t insure their business? Well, some claim that they’ve never heard about business insurance, while others simply don’t care or think that they can manage without it. There are also people who think that having home insurance is enough, yet that’s seldom the case, says Consumer Action’s direction of national priorities, Linda Sherry.
Steps you need to take to insure your home based business
If you have an online business and would like to insure it as soon as possible, then there are a few steps you need to take. Here they are:
The first thing you need to do prior to insuring your business is to evaluate the cost of your business equipment. For instance, if you’re an artist that shoots professional videos for presentations, etc, then you may own equipment worth tens of thousands of dollars. The thing is that your home insurance has a certain limit on the amount of money it can pay you in the event your equipment is damaged and what’s more is that certain types of disasters may not be covered by your current policy.
Let’s say that you have someone over at your place in order to film a video, but as the person walks through your home, he trips and falls on your equipment, damages it and injures himself in the process. Under these circumstances, you may be sued by the injured party and at the same time you’re also going to pay the costs of having your equipment fixed. Based on information from the RMIIA (Rocky Mountain Insurance Information Association), even if you do have a standard homeowners insurance policy, it doesn’t cover business liability, so you’ll end up paying for everything out of pocket.
Business related risks
There is a multitude of home based businesses that people have and each of them has its own risks. For instance, let’s say that you have a business where you give people advise to improve their business, health, etc. If you end up giving the wrong advice to someone and that person suffers an injury or loss, then you’re going to be liable for it. So if you’re a cosmetologist, lawyer or financial planner, then you may want to consider getting this type of insurance as soon as possible.
What type of insurance should you get for your home-based business?
There are many types of insurance you can get for your home based business. In general the factors that influence the kind of insurance you need to get include whether you work part time or full time, the amount of money you earn, the type of business you run and whether clients need to come to your home or not. To better assess your specific needs, it’s best that you meet with an insurance agent or broker.
Add your business to your home insurance policy
If your business is small, then you may be able to purchase a rider from your home insurance company. In terms of cost, you are looking at around a hundred dollars a year and may benefit from coverage of up to five thousand dollars a year, says the RMIIA.
Get an in-home business policy
Based on information from the RMIIA, this type of policy was conceived as a result of the high growth of home based businesses. What’s great about this type of policy is that for about two hundred dollars a year, you’ll be covered for lost income if you’re unable to conduct your business due to a disaster, general liability and business equipment. An in-home business policy can insure your property for a maximum of ten thousand dollars and if you want, you can purchase liability coverage ranging from 300 thousand to one million dollars.
Purchase a business owners’ package policy
If your clients visit your home and you run a full time business that generates a lot of revenue, you may want to consider buying a BOP or business owner’s package policy. What’s great about this policy is that it can cover businesses with sales of up to three million dollars. According to Marc Cohen who’s with the Bearence Management Group, this policy covers your liability and also equipment. In terms of cost, it usually ranges between five hundred dollars and a thousand dollars a year.
Useful advice for getting insurance for your home-based business
The best way to get business insurance is to speak to an independent insurance agent or broker. Be sure that he has access to a wide range of insurers so he can provide you the best commercial insurance policy for your needs.
Speak to your home insurance company
You should also consider speaking to your home insurer about getting business insurance. If you don’t, then in the event your business equipment is damaged due to a fire which burned down your property, your insurer can refuse to reimburse you for it. If required, you should be prepared to get a new business insurance policy. This is especially the case if the type of business you run is considered high-risk.
Don’t forget about car insurance
If you use your car for business purposes, then you certainly need to keep your insurance company informed about it. There’s still a chance you’re going to benefit from coverage from your car insurance policy, but it all depends on where you live and the insurance company you use. If you don’t want to put yourself at any risk, then it’s recommended that you keep your insurance company informed with everything they may need to know about your business. If required, be sure to get extra coverage so you can have the peace of mind that you are going to be properly covered if the inevitable happens.