Working from Home? Expand Insurance as Your Business Grows.
Gerard T. Dolan, LUTCF
Insurance & Financial Services Professional helping business owners realize financial independence & Non-Profits fulfill their mission through tax diversified planning.
As more and more people start their own businesses, many of them start small and run the business from home.
In the beginning, it might just be a side hustle to earn a little bit extra on top of their day job salary, but as it grows, your homeowner's or renter's insurance may not cover damage to your business assets. Some 40% of small businesses lack adequate business insurance, according to the Insurance Information Institute.
If you are running a small business or working freelance from home, and if the loss of machinery, tools, data or IT equipment would seriously impair your ability to make money, you want to make sure you have the right coverage.
More importantly, you may be exposed to liability claims that can damage your ability to continue in business and puts your personal assets at risk.
To safeguard your business operations and your personal assets, you may want to follow these tips:
Review your insurance coverage
If you are running a home-based business or need more protection for business property that is in your home, you may want to consider purchasing additional coverage.
Depending on your needs, you may have a few different options for protecting your business property. And you’ll need to determine if your liability coverage extends to your home-based business operation.
?Rider to a homeowner's or renter's policy
The most inexpensive home-based business insurance is an add-on or rider that expands a homeowner's or renter's policy to cover the company.
The cost of such a rider is minimal - often a few hundred dollars per year . This type of insurance may be appropriate for a one-person business without a lot of valuable equipment or many business-related visitors, and unlikely to suffer a major loss if unable to operate for a while as a result of fire or other disaster.
?Business owner's policy
Business owners who need more substantial coverage should pay for a business owner's policy. This comprehensive policy is the most common type for small business and covers issues like:
Other coverages
Depending on your business, you may need additional coverage. If you have employees, you'll need to secure a workers' compensation policy.
If you provide professional services, like graphic design, legal services, architecture, etc., you'll also likely need a professional liability policy.
?Work with an Insurance Advisor
The only way to make the right choices is to work with an experienced insurance professional who can help you evaluate your home-based business insurance needs and recommend the appropriate insurance coverage.