One expense that you cannot overlook is home business insurance. There is risk involved in any type of business, whether it's a work at home business or a large corporation. Failure to adequately protect yourself with business insurance, aside from homeowners or renter's insurance, is risky business. Here are some home business insurance options available:
1. General Liability Insurance
Do you plan on having clients visit your home? Chances are that your homeowners policy does not cover those visitors. What if they were to slip and fall on your walkway? You would be responsible for paying all costs related to their injuries. Your homeowners or renter's insurance would not pay for it because they expect to cover only normal activities associated with living in a home or apartment. Inviting the public to your home for business would not be considered "normal." Contact your home insurance provider; you may just have to add a rider. You should also consider your options with providers that specifically sell home business insurance (to be sure that you are fully protected).
2. Professional Liability Insurance
You'll need professional liability insurance to cover any errors, omissions, or other negligence on your part if you offer professional services. This will come in handy if you need to pay to defend yourself, and to protect your home and other assets from being taken away from you. Even if you are confident in your abilities, you may make mistakes, or unhappy clients may seek revenge by bringing legal action against you. There are various names for this kind of insurance in different industries, such as "Errors and Omissions" and "Malpractice Insurance."
3. Products Liability Insurance
You'll need coverage if you distribute or manufacture products to the public. Products liability insurance protects you from injuries caused by the products you sell. Research the norm in your industry, and weigh the risks. For example, you may not need it if you make and sell ceramic dolls, but you may need it if you distribute canned foods. It's an important insurance to consider if you store inventory in your home.
4. Business-Related Auto Insurance
When you use a car strictly for business, you will need to purchase business auto insurance. Most home business owners use their vehicles for both business and personal use. If you find yourself driving to business meetings, running errands, or driving for business-related activities, you should consider having business related auto insurance in addition to your personal auto insurance.
5. Home Office Insurance
This may be a good option for smaller home businesses, but it will not cover inventory stored at your home. It's a cross between business insurance and homeowners insurance. The coverage is limited, so be sure to check the restrictions. The more likely you are to be sued, the less likely you'll be covered under a home office insurance policy.
Look to see whether your insurance provider can bundle packages for you to make these insurance options affordable (or purchase a business owner's policy that will cover everything for your business). If not, prioritize this list based on your industry and what you can afford. Add insurance as you go along, if a business owner's policy would be cost prohibitive to start with.
Daphne Mallory, Esq. is the co-owner of Mallory Writing Services and has written more than 100 articles helping home based business owners and entrepreneurs start and market their business. You can learn more about her here.