Business insurance planning checklist with documents and binders, concept for risk management

Business insurance planning checklist with documents and binders, concept for risk management

Small business owners should know that neither homeowners’ nor renters’ insurance policies typically cover home-based businesses. As such, if you run a business out of your home you should seek assistance from an insurance professional to provide you with greater details concerning the types of home-based business insurance that are available for your business. Among these you should consider:

Business Property Insurance – If you use any kind of equipment to run your home-based business (e.g., computer, fax machine, printer, furniture, etc.) you should have business property insurance. This insures you against loss or damage to property used in your business that your homeowners’ policy typically doesn’t provide.

General Liability Insurance – If you have clients or other visitors come to your house for business purposes liability insurance is necessary. Liability insurance protects you and your business from being liable for damages caused to another person or property. For example, if someone making a delivery to your home-office trips and falls you’ll need liability insurance to cover the claim.

Advertising Liability Insurance – Also known as Advertising Injury Coverage, if another business alleges injury due to your advertising or use of infringing trademarks such coverage will cover the cost to defend such allegation and even remedy the situation should you be held liable. If you use a trademark or advertise online it is a good idea to have this coverage in your insurance portfolio.

Acts and Omissions Coverage – Just like businesses that are run away from the home, a business being run from inside a home needs Acts and Omissions insurance. This coverage protects you from liability stemming from your business’s acts or omissions in providing its goods or services. Professionals, such as accountants or lawyers, call this Professional Liability or Malpractice Insurance. But just like professionals, all businesses should carry a general Acts and Omissions policy to protect them for their goods and services.

Product Liability Coverage – If you run a business that makes or supplies a product consider product liability coverage. This coverage protects your business for damages to property or a person caused by a product that you designed, manufactured or supplied. If you have ever seen a warning label on any product, that is most likely a direct result of a product liability lawsuit. So even if you think your product could never injure anyone, it is still advisable to have this type of insurance as it is what we cannot foresee that often leads to a claim.

Business Automobile Coverage – If you use a vehicle for business purposes your personal auto policy won’t cover the business use of the same. Instead, secure business automobile coverage which will provide coverage if you are in an accident.

Other C overages – There are other home-based business insurance coverages that may be important, depending on your business. A local insurance agent can guide you through what you need depending on your circumstances.  For example, if your business has employees, you may need workers compensation insurance. Commercial crime insurance protects against losses from equipment theft, fraud and other crimes. Furthermore, endorsements and riders on homeowners’ policies in addition to specialty home and office policies are important coverages that small business owners should consider.

So, does your home-based business need insurance? Yes it does.

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