Step five in starting your home based business, is to purchase the appropriate insurance. It is important to remember that generally, your homeowner’s insurance does not cover home businesses. At best, you may only have limited property damage and no liability coverage. In fact, a home based business claim could possibly void your homeowner’s insurance all together!
Home based business insurance will cost you some money, but not having it could cost you a lot more.
What kind of home based business insurance you need really depends on what type of home business you are running. For starters, look around your home office, and estimate how much money you would need to replace all of your equipment. Also, it is always a good idea to have additional liability coverage with your home based business coverage. That way, if a client visits, and perhaps falls and breaks his or her arm, you will have insurance to cover that.
If you use your vehicle for business purposes, you will also need to make sure you have proper coverage through your automobile insurance policy. If you do not, you could also void your automobile insurance policy! However, a big plus to carrying this coverage, is that many insurance companies will give you a discount for carrying multiple policies with them! Sometimes, the discount will almost cover the cost of the additional policy!
If you provide a service, you will need to carry professional liability coverage. Also, you may also want to consider malpractice insurance. If your business is to provide advice, you will likely want to carry errors and omissions insurance, so that you are protected in case your client claims that you didn’t tell them something that causes them some loss.
One final thing to consider, is that you should carry business interruption insurance. This type of insurance will protect you if something happens and you are unable to run your business for a time. This will help protect you from loss of revenue while you are out of commission.