We are often asked the question, “Do I need insurance for my home-based business?” According to the U.S. Small Business Administration, over half of all small businesses in the United States today are home-based. With that number continuing to grow, protecting your investment with the proper insurance coverage is more important than ever. While a homeowner’s policy protects your home, it may not insure parts of your business.
Here are some examples of home-based businesses that may need a business insurance policy:
- Web Designer
- Interior Decorator (especially with inventory at home)
- Photographer
- Home based hair stylist
- Professional counselor seeing patients at home
- Artist with a studio on your property
- Buyer who stores and ships merchandise at home
If you are planning to start a home-based business or are already in operation, ask yourself the following questions:
- Do you store merchandise in your home or in a detached structure on your property?
- Will you have office equipment/technology at your home?
- Will there be customers on your property?
- Will you have employees working in or outside your home?
- Will you maintain client or employee records on your computer?
- Are you selling a product? What happens if a customer is injured by one of the products you sell?
- If you are providing a service, what happens if a customer is not happy with your work or you miss your deadline?
- In the event of a disaster, have you completed an inventory so you would know needs to be replaced? Would you be able to cover the cost to replenish your inventory and office equipment? Could you afford to live without the income while you get your business back up and running?
An insurance policy for your business offers protection from potential liability claims and losses, including damage to your merchandise and equipment. Here are a few types of policies available:
Your Homeowners Policy
The typical homeowner’s 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 to provide adequate coverage.
A Home Business Policy
This type of policy is for medium-sized businesses ($2,500-$10,000 in assets) and provides both property and liability coverages. Liability coverage provides protection if a customer is injured by a product or slips and falls while on your property. 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, or you have a home-based business but are unsure if you need coverage, contact us and we will be glad to help you determine which policy is best for you.
Workers Compensation Insurance
The rules about when an employer must provide workers compensation insurance vary by state. In South Carolina, if you have 4 or more employees including owners, family members working in the business, and part time employees, you need workers compensation coverage.
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- Trusted Choice: Small Business Insurance
Choosing the right insurance agent is one of the most important decisions you will make. The Turner Agency, Inc. is a local Trusted Choice® independent insurance agency located in Greenville, South Carolina. Serving the Upstate of South Carolina and beyond since 1962, we offer a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs for your business, homes, automobiles, recreational vehicles, secondary homes, and more. Contact The Turner Agency today.
The information in this article was obtained from various sources, including Trusted Choice, SCDNR, Central Mutual Insurance, and The Hartford Insurance, and is not all inclusive regarding the subject matter. This content is offered for educational purposes only.
