You have a lot on your plate as a small business owner – finding clients and customers, managing your cash flow, and mitigating the risks that come with being your own boss. With all these things on your mind, you might have forgotten to consider insurance for your business – or, you might not have realised you need it. If that’s the case, these five common insurance questions will help you get started on protecting your home-based business.
- Does my home insurance cover my home-based business? Sorry, but your home insurance does not cover your home-based business. In fact, if you haven’t disclosed the fact that you’re running a business from your home to your insurance company, you might be at risk of voiding your policy. Also, some companies don’t provide insurance if a business is being run out of the home, so have a conversation with your current company right away and start shopping around for a new provider if that’s the case.
- My business is very small, do I really need insurance? Yes, you really need insurance. One report has shown that around 50 percent of small business owners haven’t bought insurance, either because they think they don’t need it or because they’re afraid of the cost. Regardless of the size of your business, you need coverage that will protect your livelihood from anything, whether it be damage to your home that prevents you from working, or a lawsuit because of problems with your product or service.
- Does my car insurance cover the business materials that I store in my vehicle? Again, the answer is no. Your car insurance only covers your car, not any business inventory, equipment, tools or supplies that could be stolen or damaged while in your car. Also, if you’re using your vehicle for business purposes, you should let your insurance provider know.
- What kind of insurance does my business need? There are many types of insurance that protect small businesses; your specific needs will be dependent on your business. For example, professional liability insurance provides protection if you are sued for errors, omissions or negligence when providing professional services. Product liability will provide protection if your products are found to be defective or if they cause harm to someone using them. If you’re a sole proprietor, life insurance protects your family if something happens to you, since you will be personally liable for all the debts of your business. On the other hand, if you have partner and they pass away, partnership insurance will allow you to purchase their shares and continue running the business.
- How can I save money on my insurance coverage? Like any other type of insurance, the best way to save money is to shop around and compare quotes. Also, you can potentially pay an annual premium upfront rather than monthly payments; like your other forms of insurance, this option often comes with a discount.
If you’ve been relying on your home and car insurance to protect your home-based business, it’s time to make a change. Contact your insurance providers and let them know you are using your home and your vehicle in the operation of your business. Then, take some time to shop around and find the best insurance provider for your home-based business. When your business is protected, you’ll have one less thing to stress about, and more time to dedicate to your customers and clients.