Do you dream of starting your own business? Conversely, are you stuffed into a room that feels like a closet, working from home due to the pandemic? Either way, your insurance needs are likely very different than what they were.
Whether working from home during the pandemic or starting a home based business, if a client or customer were to visit, you would be liable if they were injured. Likewise, if co-workers or employees work out of your home with you, you are liable if they get injured. You could even be liable if a delivery person with a package for your home-based business were injured while delivering the package.
Liability Coverage as Part of a General Business Liability Policy
When a guest of your business is injured, your business is liable for these injuries. Of course, that really means that you are liable – but not on a personal level. A business liability policy (also called a general liability policy) can be obtained separately in order to provide enough liability protection. In some instances, endorsements can be added to your homeowners insurance policy to allow it to cover these business liabilities.
Liability Coverage as Part of Homeowners Insurance
Your home insurance covers the personal liabilities you have when a friend or guest is hurt in your home. Unless you have a special business endorsement, most homeowners policies exclude those liabilities related to the operation of a home-based business. If working from home due to the pandemic results in more visitors, then you have a higher level of risk. Check with your insurance company to make sure you’re adequately protected.
Use the ValChoice homeowners insurance calculator to estimate your home insurance cost.
Whether starting a business or working from home, you likely need to make changes to you home insurance. As a business owner, you may be using your vehicle for business use. Your insurance company needs to know this and will likely raise your rate. Use our car insurance calculator and be sure to select “Business or Commercial” use to estimate the cost of your insurance.
For those not driving due to the pandemic, your use of the vehicle may be dramatically different. In some cases, drivers can furlough vehicles and drive a different vehicle. Many insurers allow vehicles to be changed from being used to commute to being used for pleasure. Some insurers allow the miles driven to be adjusted. However, others require telematics devices to measure miles driven, or don’t include miles in the rating process. Many of these changes depend on what your insurance company will allow. The insurers internal policies and rating system will typically dictate changes that can be made.
Use the ValChoice car insurance calculator to estimate your car insurance cost.
Workers’ Compensation Coverage
If you have employees, then you may be forced to have workers’ compensation insurance. Workers’ compensation insurance guarantees that your employees can recover some part of their income if they can’t work as the result of an injury that occurred while on the job. Because you are accountable for maintaining a safe workplace for your employees, workers’ compensation insurance protects your business from being taken to court if an employee were injured while working. Even if your company is small enough that you are not legally required to carry it, this is still an important coverage to consider.
Commercial Property Insurance
If your home is burglarized and your personal items are taken, then your homeowners policy will generally compensate you for your losses. But if your business articles are stolen from your home, it is doubtful that the homeowners insurance policy will cover their loss, unless you’ve had that particular provision built into the policy. Instead, a commercial property insurance policy that protects your business property could be applicable.
Depending on the profession you work in, you might need a professional liability policy. These protect you against liabilities specifically encountered by individuals working in your profession. Those liabilities can include errors and omissions insurance for those in the financial industry, malpractice insurance for those in the medical field, or the more generalized professional liability insurance.
As a home-based business owner, with a little time and some proper planning, you can position yourself to minimize or avoid insurable risks that could harm your bottom line.
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