When Your Home-Based Business Needs Business Insurance

by Jason Cass

Congratulations! If you’re reading this, your business is probably growing or has grown, and you’ve probably reached that crossroad where you need to start considering whether or not you actually need a business policy for your home-based business.

You’re running your business from home, and you’ve been getting away with operating it fairly smoothly without too much risk. But now you’re growing, and more money is coming in, you’re starting to feel the itch to start protecting your overall operations.

You have pretty good homeowners coverage, but will this help protect your business? The reality is that most homeowners’ policies don’t cover damages related to your home-based business.

How do you know when you need additional business coverage?

Use this checklist to find out if you need a business policy for your home based business:

Do you have a home office? You may need additional coverage to help protect yourself from work-related incidents that occur in your home.
Do you have any business data at home? It doesn’t matter if it’s digital data or printed out, technology-related vulnerabilities leave businesses prone to lost income and client lawsuits.
Do customers, employees, or business contacts come to your home? Many home-based business owners are surprised to learn that their homeowners policies often don’t cover third-party injury claims related to their work.
Does your homeowners policy exclude coverage of business equipment? Under most homeowners policies, operating a home-based business is a direct violation of the policy terms.
Does your home-based business comply with all federal regulations, health codes and city and state regulations? If not, this could nullify your existing coverage.
Does your business require you to drive to meet with clients? You may need a separate business auto policy.
Do you have employees? You may need workers’ compensation coverage.

What’s Next?

Check with your insurance agent to see what policies make the most sense for your home-based business. You don’t want to pay for coverage you don’t need, but you also want to be sure you have adequate protection related to your business activities.

You’ve made this far! Now it’s time to reward yourself by facing the reality of becoming a “real-deal” business operation. Congratulations!