A few years ago, my dad started his own archery business out of his and my mom’s garage. He LOVES hunting and has a passion for helping others improve their hunting experiences, whether it’s buying a new bow, fixing a broken one, making custom arrows, or giving lessons to children and new hunters. One of the things he did before starting his business was to make sure it would be properly insured. This is very important for everyone wanting to start a new home-based business!
Why? Because there are plenty of instances in which a home-based business insurance policy may be able to save you from financial loss. Here are some of the questions my dad asked himself and talked with his independent agent about at the beginning of his endeavor.
- Will merchandise be stored in my home?
- Will I have office equipment?
- Will there be customers on my property? What if a customer slipped on a wet floor or an icy sidewalk?
- Am I selling a product? What if a customer is injured by one of these products?
- Am I providing a service? What if a customer is not happy with my work? Or I missed a requested deadline?
If you can answer yes to any of these questions, too, then you may need a Business Insurance Policy. According to a Trusted Choice online article, “a business insurance policy can protect you from potential liability claims and losses or damage to your merchandise and equipment. Because there are so many different types of home-based businesses, the protection you need can come from a number of different policies.”
Here are a few types of policies available:
- Your Homeowners Policy. The typical homeowners policy doesn’t provide coverage for a customer who’s injured on your property and may only provide limited coverage up to a special limit of liability for damage to merchandise or office equipment. For smaller home-based businesses, you may be able to add an endorsement to your current policy to provide coverage. Depending on the scope of your business, you may need a separate policy altogether to provide adequate coverage.
- A Home Business Policy. This type of policy is for medium-sized businesses ($2,500-$10,000 in assets). It will provide both property and liability coverages. What does liability coverage do? It could provide coverage if a customer is injured by a product or slips and falls on your driveway or front porch. Liability coverage could also provide a defense if a customer sues you for certain things, like missing a deadline.
- A Commercial Insurance Policy. This type of policy is for larger home-based businesses that have a lot of merchandise and/or equipment and have the need for more and different types of liability coverage.
If you are thinking of starting a home-based business, speak to your local independent agent like my dad did. They will be able to help you decide on the policy that is just right for your new business. My dad has the peace of mind he needs to successfully protect himself, his customers, and his business.
The information above is of a general nature and your policy and coverages provided may differ from the examples provided. Please read your policy in its entirety to determine your actual coverage available.
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Blog originally published April 16, 2019.