A significant number of Albertans operate their business from their home. What a lot of them don’t know is: how it affects their home insurance. If your business involves inviting clients into your home, then a standard home insurance policy may not cover any liability incurred. Home insurance ideally does not cover the material used for business operations.
To ensure you have the right protection, you need to get home-based insurance that involves special considerations.
We know you must be having a lot of questions. How about we answer them one by one.
Do You Need Home-Based Business Insurance?
Yes, having home-based insurance is very important. Home-based insurance covers any liabilities under the business that regular home insurance does not include. The type of coverage does, however, depend on the kind of business you own. If you have a fairly small business an add-on to your home insurance should do, and if your business is considerably bigger you might need to get a general liability or commercial property insurance.
Getting home-based business insurance is important because your home insurance doesn’t cover any commercial losses. If anything happens; a storm, disaster, or theft and you lose your business belongings, no one will get you reimbursed. Not just that, if you face any legal action from a client, it’ll be your responsibility to pay for any charges incurred.
Now that you’re convinced, let’s see what type of insurance you need.
What Type Of Insurance Do You Need?
As mentioned earlier, home business insurance can be a simple extension to your home insurance. But that’s if you have not more than a couple of people working for you. If your business is larger than a two-person operation you might need to consider standard business insurance.
If you work for the government or any other high profile agencies, such as working as an author, consultant or event organizer you may need to get Errors and Omissions Insurance as it is a requisite for some contracts.
Although this is the basic logic, a lot of other factors are involved in deciding what type of insurance you should get. The factors are:
● The type of business
● Industry
● Annual revenue of your business
● Number of employees
● Value of the property your business is located at
The best way to decide on a type of insurance is to call your financial advisor. They will be best able to assess your particular situation and provide suggestions.
How Much Does A Home Business Insurance Cost?
If you own home insurance and wish to add to it a decent home office insurance policy, it’ll cost you about $25-$50 for the extension. This basically increases the limit of contents covered under your home insurance, so tools that you now use for business such as a computer, printer, or any industry equipment is covered.
This is a much better way than purchasing separate business insurance, especially if your business property isn’t extremely expensive. Also, the prices mentioned above are an estimated average, to get a more clear idea: contact your broker.
If you wish to get individual home-based business insurance, it’ll roughly cost you about $1000. Again, this is a variable cost and it depends on the value of contents of your business and the cost of liability.
You should especially go for commercial liability insurance if your business involves expensive inventory. Getting a professional opinion on what you should do would be the perfect way to move forward.
Is A Home Business The Same As Working From Home?
No, it’s not. Working from home isn’t necessarily a business. The insurance company is only interested if you own a business. Say, in the pandemic, you were working from home for a company, in that case, you don’t need to let your insurance provider know. But if you’ve recently started a business or you work as a freelancer then you might need to discuss the details with a financial advisor.
If your business inventory is expensive or you regularly have clients over, it’s advised to get home-based business insurance. Otherwise, or if you are a freelancer needing not many tools you may skip on it as long as any damage won’t blow a hole in your pocket. Again, an advisor will be able to help you much better. Contact one now!