We can all appreciate that starting your business from home is no simple venture. Working from home, may just start out with you or you may have other another employee based on your home premise working with you or remotely.

Business owners are now asking themselves is whether insurance is necessary for working from home?  What is home-based business insurance? How much do I need to pay for home-based business insurance? So, let’s take a closer look at what insurance is, and whether you need it for your home-based business.

If this is the first time in starting a home-based business, then this may be the first time you’ve encountered liability insurance. While those that are seasoned business owners when was the last time you reviewed your current insurance policies?  How many times have we heard that won’t happen to us – we’ll be okay? Incidents such as flooding or storm damage or an accident such as falling down the steps can lead to expensive medical bills and even common law claims, all of which will eat up your cash flow extremely fast.

There are many types of insurance policies available in the marketplace, not all are going to be applicable to your business. Do your research and find the right type of insurance for you and your business.  Not all insurance agencies offer the same products and services and the cost of an insurance policy for the same type of cover can differ significantly. For example, AMMI offers business insurance and home business insurance, while Spencer Jones Insurance Brokers offers insurance for people running yoga classes or massage therapists.

Remember the kind of insurance you need for your home-based business will depend on the type of products and services offered. For example, if you are a consultant then Public Liability, Professional Indemnity and Home business contents insurance may apply to your business.

Let’s take a look at the various insurance policies available;

Public liability insurance – helps protect you and your business against a third party in the event of injury or death or damages and loss to their property where you are at fault.

Professional indemnity insurance – help protect you against the financial consequences of any mistakes you – or your staff – might make.

Property insurance – is a policy that provides financial reimbursement to the owner or renter of a structure and its contents in the event of damage or theft.

Workers’ compensation insurance – is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue their employer for the tort of negligence.

Home-based businesses – provides opportunity for people to choose their own business, to work at their own phase and own schedule. … Depending on risks to one’s business, the insured may add riders or additional items to be insured, to his or her homeowners’ policy to cover normal business risks such as property damage.

Product liability insurance. – also known as general liability is usually included as part of a public liability insurance policy. … Product liability insurance protects against claims of personal injury or property damage caused by products sold or supplied through your business.

Vehicle insurance – is a policy of physical damage and liability coverages for amounts, situations, and usage not covered by a personal auto policy.

Business interruption insurance – is a type of insurance that covers the loss of income that a business suffers after a disaster. The income loss covered may be due to disaster-related closing of the business facility or due to the rebuilding process after a disaster.

   Your homeowner’s house and contents policy won’t cut it

Many people with home-based businesses often make the assumption that their homeowner’s house and contents insurance will cover them should any accidents or losses occur. Unfortunately, reality is, it’s not often that your personal homeowners’ policy will cover business issues. It’s best to speak to your insurance provider and clear up any misconceptions you may have.

At the end of the day, securing insurance for your home-based business is just good business sense. Depending on your industry it could be mandatory to have insurance in place as of the first day of operation. The hope is that you never have to use it, but at least it’s there as a safety net.