If I run a business from my home-based office, do I need insurance?
With the myriad of different types of insurances that now exist, it is of little wonder that people who run businesses from home-based offices are often confused as to whether they need insurance for their business or not. More often than not, home-based business owners don't think they need this type of insurance - for example, they may feel they have no assets to insure as they run a consulting type business, or think their business assets are covered under a different type of insurance. However, when something goes wrong, this is often far from the case. It just takes one theft, or one disgruntled customer who wants to sue, to turn a small home-based business from success to financial ruin. So, if you run a business from your home office, the answer is yes - you do need insurance. But which type? Here are the three main types of insurance for home-based business owners:
Comprehensive business owner's policy
As the name suggests, this type of policy is the most comprehensive, and covers most forms of loss, including damage to business equipment, liabilities caused by staff or customer injuries, professional liability (protection against being sued), loss of business income for any reason, or natural disasters. In some circumstances, this policy may also cover company vehicles.
This type of insurance is the one typically held by larger business owners, for example, those who have an established office space, etc. It is the most expensive type of business insurances, but for good reason - it provides complete protection if something goes wrong. Business owners who perceive their business risks to be medium to high should definitely consider this option.
Policy designed specifically for businesses run from home offices
Unsurprisingly, policies designed specifically for home-based businesses often provide less coverage, as they assume that the business has less assets to protect. These types of policies cover losses such as bank account fraud, loss of important documents, or staff injuries or equipment damage.
The policy, however, won't protect you against loss of your business income due to being sued, for example, so if you think there is even a risk of this, you should consider a more comprehensive policy.
Adding extras to your home insurance
Another option for insuring your business is to add extras onto your home insurance. Whilst this option won't cover the business per se, it will cover damage to important business equipment or natural disasters, depending on your policy. Whilst this type of protection is only minimal, it may suit if you feel there is only a very minimal risk - something that is always incredibly difficult to gauge.
If you run a business from your home office, you definitely need business insurance - so be sure to investigate the different options available and select the one that provides the right type of coverage.