Friday, April 17, 2020

Home Based Business

Do You Need Insurance for Your Home Based 

 Many people are having to adjust to working at home right now. If you have been laid off, maybe you are considering starting a home-based business. Dog walker, free lance writer/photographer, consultant, stylist. If you are working from home for your employer, make sure you are still covered under their Liability policy. If you are going to work for yourself, you need to know how to protect yourself and your business. 

Do you need insurance from the start? 
      Do you need insurance at all? 
               What if you only do this part time?

Yes!   Yes!  and  Yes!

Many home-based business owners believe their Homeowners policy will cover their business. But homeowner's policies EXCLUDE business coverage. Commercial risk is different from personal risk, so the policies contain different types of coverage. You want an insurance policy built for your business needs. You want a policy built for your protection. 

The Business Owners Policy

There are many policy options in commercial insurance (too many to list in one blog post.) But the most common type of policy for small businesses is the Business Owners Policy (BOP). It usually combines  coverage a business would need into one policy.

Three types of coverage in the BOP.

General Liability:  This covers your company's legal responsibility for any harm it may cause to others. What you and your employees do or fail to do in your business operations may cause bodily injury or property damage due to defects in products, faulty installations and the errors in service you provide 
Business Property:  This covers two types of business property.  It covers the buildings themselves (which you won't need much of if yours is a home-based business) and the contents owned by the company (Business Personal Property). This would be furniture, laptop and supplies, as well as other equipment you may use in your business. 
Business Interruption: This covers the loss of income if your business operations are interrupted by a covered claim. It includes the extra expense of operating out of another space temporarily if your building is uninhabitable. (I am going to assume most carriers will not include this in policies written during the pandemic.) 

There is other coverage in a BOP, depending on the type of business. If you sell products there would be different coverage than if you sell insurance. But these are the main concerns for small business owners. Most BOPs are a minimum of $500 annually. They can be much more expensive depending on the business and the limits of coverage. But for a small home-based business that doesn't have high risk or high amounts of business personal property, they are generally inexpensive.

Other Types of Commercial Policies
Other Commercial policy types include Commercial Auto, Worker's Compensation and Professional Liability (Errors and Omissions). You can also get a General Liability or Commercial Property policy as a separate policy. They don't only come in the combination form of a BOP.

   Business owners looking for the the most cost effective way to protect their business should work with agents who have access to multiple insurance carriers. You can go through your area Chamber of Commerce or the Small Business Administration to find an agent near you. Or you can call us! 

Have questions? Need a quote?    
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