Statistics show that of the more than 30 million small businesses in the United States, 19 million are based at home. You should have home business insurance coverage to meet the needs of your home-based business. Business insurance covers liability and property insurance.
As you embark on home-based business insurance, know the types of insurance and your budget. Also, be sure to understand what’s legally required.
Here’s more on what to know about buying home business insurance coverage.
Types of Insurance
Before buying insurance for your home business, it’s essential to understand the types of business insurance.
Liability covers lawsuits with third-party injuries as well as copyright infringement and defamation. Property insurance covers stolen equipment and damage to your workspace.
Errors and omission insurance covers mistakes or negligence. Your policy will cover lawsuits and legal costs associated with your mistakes. Professional services like lawyers, accountants, and architects should buy this type of insurance.
Workers’ compensation insurance deals with employees who are hurt on the job. Business interruption insurance will cover losses in case of a storm or fire.
There are other home insurance policies to consider, so it’s best to talk with insurance companies beforehand. Also, get in writing from the best insurance companies what your policy covers.
Policies vary, but buying insurance will cost you several thousand dollars annually. It’s important to review your home business budget before moving forward with a purchase.
You’ll need to discuss with insurance companies the types of insurance required. Also, discuss what’s adequate coverage.
A lack of proper coverage could leave you bankrupt.
Do customers come to your home? You will need liability insurance.
Do you have employees? You’ll need workers’ compensation insurance for your home business.
Other considerations include buying insurance for cybersecurity or commercial automobiles. A commercial insurance policy could also cover employee theft.
Much of your home business insurance coverage depends on your business type.
It’s also a good idea to check with local business groups and the state where you reside to find out what insurance is necessary.
Insurance policies typically include a deductible. Once you reach that number, your policy covers the rest of your claim.
The higher your deductible, the lower your premiums.
Many business owners choose a higher deductible because it costs them less over the long term. However, you must budget appropriately so you can afford a high deductible.
What to Know About Home Business Insurance Coverage
Before purchasing home business insurance coverage, there are things you should know. Consider the types of insurance and your budget. Also, consider the legal requirements and understand the deductibles.
There are many things to understand, and it’s best to list what’s important to you and your business strategy. Talk with other industry professionals. Knowing their plans can help you make a decision.
If you found this article helpful, read about careers, education, and technology on our website.