Home-Based Business Insurance
Many people who operate a business from home mistakenly believe that their homeowner’s or renter’s insurance will provide coverage for the business. The truth is most insurance companies exclude home-based businesses from coverage or offer very little coverage if any.
For example, if you have an unattached workshop or garage, you have coverage for the building and contents, unless, the contents happen to be used for business. If you plan to operate a business from home, you have more at risk that your stuff. The liability exposure is what can create significant problems for the business owner. Let’s take a look at seven of the most popular:
The risk exposure here is significant. The freelance writer will always have exposure when they post online content or give advice. This profession can expose the business owner to personal injury actions. Personal Injury in business insurance represents slander and libel. What is said or written about an individual in a public forum can cause damage to the reputation resulting in a financial loss. Even if an article that is posted results in a frivolous lawsuit, the lawsuit must be responded to by a skilled attorney and that can become quite expensive. The Personal Injury coverage in your General Liability Policy will provide for your defense and pay the funds needed for a settlement or judgment awarded by the court. Your homeowner’s insurance will not.
Working from home as a freelance web developer offers many exposures that must be mitigated with a Professional Liability policy and a Business Owner’s Policy. This type of service exposes the web developer to several areas of risk. For example, if the content or graphics on the site infringe on a copyright or the images are not licensed properly, or the content is considered to be slander or libel, your client is going to get sued, and you will also be named as the site developer also. Every developer is going to leave their fingerprints somewhere on the site so the public will know he or she built it. The business owner’s policy will take care of the general liability (personal injury) exposure and provide coverage the electronic equipment used in the business. The professional liability policy will take care of copyright and image issues and any breach of contract disputes with a client.
Personal Trainer/Yoga Instructor
Anytime you are going to conduct business in a location outside your home; you will need General Liability insurance to cover if you cause bodily injury or property damage in the course of your instruction. It would also be very wise to carry Professional Liability if you work according to a contract or signed agreement.
What possible risk could a tutor have? Consider this from a consumer standpoint. You hire a computer because Frankie is going to flunk out of high school if you don’t get him some help. You pay a tutor every week to visit with Frankie and do what’s necessary for him to pass his finals. Three months and $5,000 later, Frankie bombs the finals and doesn’t graduate. Would you want your money back? Of course, you would. That is why your tutor should have a professional liability policy that will respond when you sue for a refund.
Home Day Care
This home-based business is very popular, and some homeowner policies will provide coverage for up to 5 children. They will not, however, cover for accusations of abuse, neglect, or molestation. These risks are significant and should only be addressed with a commercial insurance policy.
Every business coach is at risk when giving advice that makes a client’s situation worse rather than better. This type of risk should be mitigated by using a Professional Liability policy that will provide coverage for your defense, settlement costs, or court-awarded judgments.
Senior Care Services
This type of service has become very popular because of the aging population in the US. The risk here can be significant depending on the level of care you choose to provide. In any case, it is doubtful that you would get hired without providing proof of insurance with adequate limits.
Today there are more and more entrepreneurs working from home because of the convenience and the savings on office space. Unfortunately, many of these business owners are not clear on the protection that is offered by their homeowner’s or renter’s policy, and end up putting the business that they are working hard to build, at risk of financial disaster.
For more information about insuring your homebased business, contact a Saferoad insurance professional at (877) 945-7233