Insurance For Home Based Businesses: Necessity Or Not?

Having a home based business does not mean that your home insurance covers your business.  However, this is not always the case.  Not only that, your home based business, depending on what it is, may void your home insurance.  When you purchase home insurance, coverage is provided to protect your home.  Participating in activities that the insurer is not aware of can invalidate home insurance.  Find out what type of home based business insurance you need before you need it. 

 

Contents insurance is necessary to cover home based businesses. While there may be contents insurance included in the home owners insurance, an additional policy is needed.  Take some time to figure out what the worth of your home office is.  What would it cost to replace the equipment you have?  Also, think about where you use the business equipment in your home.  Do you take your laptop to the coffee shop to work occasionally?  If something happens when you are away from home your business equipment will not be covered in a home owner’s policy. 

 

Home based businesses should also have general liability insurance.  If you see clients in your home you want to make sure that there is coverage just in case something happens to them.  Regular home insurance will not cover client or employee injury.  Coming out of pocket for such an injury will be extremely costly.    

 

There are several other types of insurance that you may need for home based businesses.  Do you drive for your business?  If you do then you need additional car insurance.  You want to make sure that you are covered if there is ever any damage to your car.  Having liability for damage to other vehicles when you are driving for work is also important.   

 

Malpractice insurance may seem like something that only health providers need to worry about but that is not the case.  People that perform services on others in their homes can be susceptible to malpractice lawsuits.  If you are a hair dresser you should have some malpractice insurance.  If you don’t and something happens, you can be sued.

 

If you are giving professional advice of any kind in your home based business, you should have errors and omissions insurance.