Home Based Business
I have a home based business do I need business insurance?
Yes you do is the short answer, not having business insurance could potentially result in a huge financial loss from the denial of a claim by your insurance company.
Your home insurance policy provides very limited coverage for business contents and does not provide any coverage for liability exposures, samples, goods held for sale or business property off premise. if you fail to mention that you have a home base business in your application your insurance company may null your entire insurance contract based on misrepresentation of risk. A claim not associated with the business could still potentially be denied.
Home insurance considers everything that you use in your home for business as business property even if it is for personal use as well. The amount of coverage your home policy provides for business contents is very limited, the usual amount of coverage is $5000. There is no coverage for business property outside of your home, so if your car is broken into and your laptop is stolen and you use it for work it would not be covered. Many home based party representatives have expensive ‘sample kits’, that are not covered under regular home insurance and goods held for re-sale are also not insured.
If you use any part of your home for business and do not have business insurance you are not insured for loss to the building as a result of business being conducted out of that area. For example; you operate a wood-working shop out of your garage and a fire starts in your garage from a malfunction in the dust collection system – you have no coverage. If you have a hair salon and a pipe in the salon area breaks and caused water damage, you have no coverage.
Liability claims are also an area of concern for home based business. If anyone enters your home for anything related to your business and is injured you have no coverage. This can be as simple as the courier slipping and falling on your icy walkway when he is delivering a package to you.
Business insurance does not have to be expensive especially if your type of business is suitable for a home based business policy or a small business package policy. Failure to have business insurance may be very expensive because you could have to pay for repairs, replacement or injury claims yourself.
Make sure that your broker and Insurance company know if you have business operations in your home. If you have a home based business and need coverage contact us and we can offer a quote with no obligation.