Home Business Operator

Insurance For The Home Business Operator

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Small business owners operating from home often realize they need insurance for their home business, especially since basic home insurance may not be enough to protect home business operations. The task of finding out which insurance is best for a particular home business starts with knowing what options are available.

Types of Home Business Insurance

Read on to know the types of home business insurance that can protect your home operation today.

1. Public Liability Insurance

Public liability insurance offers broad coverage from third-party claims of injury or damage on your property or in the property of your business.

For example, if a customer slips and falls on your property while buying a product from your business, this type of insurance can provide coverage if that person sues the business alleging negligence that causes injury, death, or damage to that person’s property.

This type of insurance covers your lawyer’s fees and all fees connected to your defense, as well as lost wages arising from missed work and even transportation expenses when you need to appear in court.

This is an ideal form of insurance if you receive customers in your home or if you work at client locations. This is also required insurance if you operate an actual business location such as a retail store or a restaurant.

2. Workers’ Compensation Coverage

Workers’ compensation offers benefits for home business operations that have employees. Coverage can pay for the expenses arising out of work-related injuries or illness from medical and hospital care to disability benefits.

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This type of insurance also covers lost income when the worker needs to take time off for recovery.

But what if your workers are performing relatively low-risk tasks?

Do you still need workers’ compensation insurance?

The short answer is Yes since most states require this insurance for businesses that employ regular workers. Even with low-risk work, you still face the possibility of claims such as slip and fall suits or suits for carpal tunnel syndrome.

It is a wiser move to have this type of insurance in place for your workers rather than run the risk of paying out of pocket for a costly claim later on.

3. Business Income Insurance

There is always the danger of losing business income from a variety of causes, from natural disasters such as floods and fires to thefts and other losses. Business income insurance can pay for the period when a restaurant has to stop operations due to a fire, for example.

Business income insurance can also cover instances when your business cannot operate for the meantime due to government restrictions, similar to what happened to most businesses in the US due to COVID lockdown restrictions.

Also known as business interruption insurance,  this type of insurance is ideal for businesses that have physical locations to do business, even if your business is physically located at home.

3. Homeowners Policy

Most homeowners already have home insurance which may be enough to cover losses in the home and nothing else. Most basic homeowners’ insurance packages provide around $25,000 in compensation. This may cover losses in minor equipment or inventory aside from the rest of the damage to your home. The good thing about homeowners’ policies is that they can be customized to provide additional insurance to cover equipment and inventory that you use for your business.

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4. Product Liability Insurance

Small home-based operations often do not have the luxury of sophisticated R&D and extensive quality control operations. Even if you make sure that each and every product you put out is safe for the use you can still find yourself at the wrong end of a legal claim if a third party incurs injury or damage from the use of your product. This type of insurance can be tailored to fit your specific product and the most common claims that could arise from it.

5. Vehicle Insurance

If you use a vehicle in conducting your business you need vehicle insurance. Vehicle insurance can pay for repairs and even replacements if your vehicle is involved in a covered contingency. Vehicle insurance helps make sure that you can still operate your business as usual if your vehicle breaks down.

If you are operating your business out of your home, you need business insurance. Otherwise, you will be left to pay for any losses and third-party claims that could be made against you with no financial protection to back you up. Get the peace of mind that comes with the knowledge that your business is financially protected from these contingencies so you can focus on what matters, and that is growing your business.

Sources:

https://www.admiral.com/magazine/guides/home/home-insurance-for-business-use

https://www.trustedunion.com/business-insurance/public-liability-insurance/

https://www.entrepreneur.com/article/241026

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