Home Based Business – are you Covered?

While starting and growing a business online or offline is a smart risk, it requires a lot of effort, time, and resources to make it profitable. You need to invest in an insurance cover to protect yourself from potential loss.

Your type of business and needs will guide you on the risks you need to safeguard yourself against; some losses and accidents are beyond our control.

Why Invest in a Cover

A cover comes in handy in certain situations, for example:

  • You may encounter lawsuits from customers who reacted negatively or suffered injury from using your products
  • A customer can sue you for injury incurred while on your premises
  • The loss incurred due to damage, theft or vandalism to your property in case of a fire, or strong winds, etc.
  • Motor vehicle accidents you or your staff gets involved in, in the course of duty
  • An employee is injured while performing their duties

No business can survive if it keeps digging into its pockets when such misfortunes happen. The frequency of such occurrences is unpredictable; smart insurance policy to safeguard your business is an investment you can’t afford to ignore.

Here are some covers that can guarantee peace of mind:

General Liability Insurance

This policy will protect you from third-party lawsuits that claim they incurred bodily injuries or property damage from using your product or services. The policy can also cover medical bills if a client suffers an injury on your premises.

Professional Liability Insurance

This applies to certain professions where the standard general liability insurance cover omits Professional Liability Insurance from its policies. It will protect you against negligence, errors or omissions. The cover compensates third-party claims awarded in lawsuits due to damages.

This cover will vary depending on the type of business and profession you’re in. You also have to keep in mind the standard of care attributed to your industry. For example, a medical PR has different risks associated with his business profession and so does a mechanic. Nevertheless, they both need to have an error and omission insurance cover. If you or your employee causes any damage to a client, there is a form of errors and omissions insurance for your type of work.

Property Insurance

This one is a must whether you own, rent, or lease the premises that host your business. Liability covers secures your property against calamities caused by a loss you are covered against.

Under the standard property insurance policies, natural disasters that cause mass-destruction including floods and earthquakes are not covered. If your business location is in an area prone to such issues, you will need to check with your insurer to price you a separate cover.

When you face this kind of interruption in your business, the operation you can opt for loss of earnings cover during that period.

Business Interruption Insurance

If your business cannot operate normally due to covered property loss, the downtime is compensated by this cover. This will ensure that your company continues to run smoothly despite outside forces.

Product liability insurance   

Product liability claims can be due to a manufacturing flaw or a design defect. For example, a customer buys a seat from you, and as soon as he sits on it, it breaks, severely hurting his back. This is grounds for a lawsuit; the client can claim that the seat was improperly assembled during manufacture, making it unreasonably dangerous. The customer can also argue that the seat was poorly designed and the company failed to ensure the seat will remain in place when used. He can claim there was no warning that the seat he purchased could only hold a certain amount of weight.

Product liability offers your business protection against such claims arising from the product your company manufactures or sells.

Commercial Auto Insurance

This policy is essential because motor vehicle accident claims are costly. Commercial Auto Insurance covers loss for all your company vehicles in case of an accident. If you sometimes use your personal car in conducting business, it is also included in this cover. This is advantageous for you especially if your personal agent denies your car claim because you were using it for work purposes.

Workers Compensation Insurance

This is a legal requirement for all businesses in almost every state in the US. It provides medical coverage for your staff in case of injury or illness on the job, it compensates lost wages arising from the injury or illness triggered by their work and protects you as the business owner from any exposure.

Business Owners Policy (BOP)

(BOP)  is a combination of all the necessary protections most business owners need in a single package.

All the major property and liability risk including crime, general liability insurance, property/ building coverage, product liability insurance, vehicle cover, etc. are indemnified in one convenient package. It also saves you money.

BOP is advantageous as it can be custom enhanced to suit your particular requirements specific to your business needs.

Alternatively, you can outsource the task of securing your business to a quality insurance agent who is conversant about your industry. He should be able to tell you the forms of insurance that are advised for your type of business and help you strategize and simplify the process.

Picking the right agent is critical for you.

The agent you choose to work with must possess the skills, knowledge as well as authority to handle your claims. Furthermore, you should be able to trust him/ her.  You may need them to be the first in line in your defense in a case where you are sued, or your business is in trouble.

In conclusion, I acknowledge underwriting your business is a costly affair, but it is paramount to avoid financial loss due to lawsuits or catastrophic events. The mass of policies out there that are a right fit for your business are overwhelmingly many, and unknowingly ignoring the relevant ones to your business can cost you dearly.

Remember to read the fine print before you sign any insurance policy, even better, send it to your attorney to verify for you what you do not understand, ensure as much as possible it covers all that you need for it to cover.   Please contact me if you would like to discuss how I can help you choose the right insurance for your Home Based Business.



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Tracie Carrigan
Author: Tracie Carrigan

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