Running A Home-Based Business: 3 Facts You Need To Know About Insurance
Home-based businesses have always been popular among business owners who are just starting out. However, the popularity of these types of businesses has grown even more since the COVID-19 pandemic as more and more people are choosing to work out of their homes. If you are currently running a home-based business or have plans to open a business out of your home in the future, there are some things that you will need to know regarding insurance coverage. Continue reading to learn three important facts when it comes to insuring your home-based business.
Fact #1: Most Home Insurance Policies Will Not Cover A Home Based Business
Far too many people simply assume that their homeowners insurance policy will also cover their business since this business is located inside their home. However, most home insurance policies specifically exclude any items that are used for business purposes. This means that any equipment you may have for your business or inventory that you keep on hand will not be covered by your homeowners insurance policy. If you wish to ensure that these items are covered, you will need to purchase additional insurance coverage for your home-based business.
Fact #2: You Can Be Held Personally Liable If You Fail To Carry The Proper Coverage
It is your responsibility as a business owner to maintain the proper insurance coverage for your business. This is because as a business owner you are not only responsible for protecting your business from a financial standpoint, but you are also responsible for protecting the financial interest of your customers and vendors. In the event that one of your customers or vendors is injured while visiting your business or through the use of one of your products, you will be liable for medical bills, lost wages, and any other financial losses that may result from these injuries. If you do not have the proper insurance coverage, both your professional and your personal assets can be seized in order to cover these costs.
Fact #3: You May Be Able To Purchase A Rider For Your Existing Home Insurance Policy
Depending upon how much coverage you need, you may not be required to purchase a completely separate insurance policy for your home-based business. Instead, you may be able to purchase what is known as a rider. A rider policy is simply additional coverage that is added to your existing home insurance policy. This type of add-on coverage is most commonly used for home-based business owners who do not have any customers or vendors that visit their business and therefore only require basic property damage coverage.
Contact an insurance provider to learn more about business insurance.
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