If you run a business out of your home, you could be without coverage.
If your work address is also your home address, you might be under the belief that your home-based business is automatically insured under the liability and contents coverage of a home insurance policy. It's not. In fact, if your home insurance provider is unaware that you run a home-based business you may be jeopardizing your home insurance coverage too.
- Related Read: Top 10 Myths of Running a Home-Based Business
Your homeowner's insurance policy is meant to protect your home as a residence, not as a place of business, and when you combine the two—your home with your business—you may be leaving yourself exposed. And, while you can get an extension from your home insurer that will cover some aspects of your business, it's like trying to fit a square peg into a round hole.
That's why, if your business and home share the same space, they probably shouldn't share the same insurance policy.
- Did you know? If you run a business out of your home, you need to keep your home insurer in the loop—even if you have a separate home-based business insurance policy. Depending on the insurer, you may have to switch companies because some won't provide home insurance if a business is on the premises.
Insuring a home-based business
Big or small, the size of your home-based business does not define the need to protect your livelihood and a home-based business insurance policy will cover your business activities when your home insurance policy will not. Because no two businesses are the same, a home-based business insurance policy can be customized to cover all aspects of your business including:
- your work computer, laptop and other expensive business equipment;
- any inventory or stock you have on hand;
- your liability if someone who is visiting your home for business purposes slips and falls;
- your liability if there are problems with the product you're selling or the service you're offering and you're successfully sued;
- your liability should you cause damage to a customer's property; and,
- operating expenses and lost income should something happen to your home (like water damage or fire) that makes running your business impossible.
Also, depending on the nature of your home-based business you may want to consider:
- Professional liability coverage: If your home-based business involves you providing professional advice you may need errors and omissions coverage. A mistake that causes a client to lose money, or causes harm in some way, could be financially devastating to your business if it leads to a lawsuit.
- Cyber protection: Technology has made it easier than ever to run a business from home, but it has also opened up a whole host of risks. Data breaches and being hacked can be costly, and small businesses are often the target.
It's your home. It's also your business. Protect both...separately.
Even though you may run your business out of the home, it's important to still treat it as a business. That's why, if your business and home share the same space, they shouldn't share the same insurance policy. Protect everything that you're working hard to achieve and compare home-based business insurance quotes today at Kanetix.ca