If you have a home-based and/or online business, you might be wondering if you even need business insurance. Doesn’t insurance protect only physical assets? Well, that’s partially true. But, what if something happens to a customer after using one of the items you sell? If you were to be sued for any reason, would you be protected? Yet, over half of home-based and/or online businesses don’t have enough in terms of business insurance. The reason is many are confused regarding the differences between what is already covered by a homeowner’s or renter’s policy.
Sure, it’s convenient to start a business from home. Many successful startups began in a home office or garage. Yet, a homeowner’s policy does not cover businesses. In addition, if you try to file a homeowner’s or renter’s claim for an undisclosed online or home-based business, your insurer may refuse to cover it or cut you off completely. Then, you may experience a world of financial hurt. This is why it is critical to take the time to understand what you need and get adequate coverage.
In This Post:
General liability insurance
Thanks to the evolution of technology, startups are more successful than ever. You can do anything from accounting to party planning to pet collars, photography and more. An online presence and some motivation are all you need. But, you also have potential for risks which homeowner’s insurance does not protect.
Even in the comfort of your own home, accidents can happen. When disasters or injuries can’t be prevented, it is important to have general liability insurance. This allows your business to recover from a liability over a third party’s property damage or injury.
Many small businesses live week-to-week. One major emergency can cause a startup to shut operations. General liability insurance can help give you peace of mind that an unexpected accident won’t cause you to lose everything you’ve worked so hard for. This is especially true if you handle other people’s property in order to do your work.
General liability insurance helps to cover the property while it is in your care. If there is a claim against you, general liability insurance can help cover the cost of hiring an attorney, court fees, settlement expenses and more up to your policy limits. It can even cover business partners. If you lose a dress you were working on, then general liability insurance covers that too.
In-home business policy
This is the type of policy to do some research on as it covers a wide range of contingencies. Some of these include losing important documents or financial theft. You can also get it to cover up to three employees. It is imperative to purchase at least one home-based polity as they can also cover business equipment and liability for injury.
Since we all work online, this means you are prone to cyber-attacks. What will you do when your customer information is breached? You’ll have to notify your customers. Cyber liability insurance covers a lot in this regard; it can even cover lost sales when customers leave due to a breach. Otherwise, just one breach could shut down your doors. According to NRMA’s business insurance, cyber liability insurance gives you access to cash to keep your business up and running until things get back to normal again. Anyone who business who uses the Internet to interact with the public should consider cyber liability insurance. This is true even if only a portion of your business is online. It covers viruses, intellectual property infringement or any other problem that can occur through Internet connections.
Personal injury or illness
If anything happened to you, what will happen to your business. Medical costs are skyrocketing, the same is true of medicines. If you have any health issues, it can wipe out your startup’s finances. The last thing you need is to worry about bankruptcy while you’re sick. This is why it is crucial to have personal injury or illness insurance. This will help pay for any medical bills without having to use your company’s assets.
Workers’ compensation insurance
If you have employees, most states require your business carry workers’ compensation insurance. This is true even if you have one full-time employee. If any of your employees are injured on the job, workers’ compensation insurance replaces wages and pays for medical care for the employees. It also helps to prevent them from suing.
If you have assets such as equipment, furnishings, computers and inventory–property insurance covers all of these items. Things can happen such as natural disasters or theft. When you work for someone else, you usually don’t have to worry about buying a computer or a printer or paying for Internet service. When you are an entrepreneur, you have to worry about all of your assets working and being available all the time.
If you are the victim of a fire or a hurricane, can you afford to replace all of your assets and inventory in one fell swoop? Most people couldn’t. With property insurance, you don’t have to pay for every replacement out of your own pocket.
Business insurance is truly peace-inducing when you realize the costs of litigation, cyber breaches and natural disasters. You worked hard to build up your business. Don’t risk it all due to a lack of insurance.