Posted on May 17, 2014
The number of people working from home is quickly growing throughout the United States. With record high unemployment, it only stands to reason that individuals would turn their creative ingenuity and work ethic into home based businesses. The added bonus is more time with children, no commuting on busy city roads and an overall reduction in stress levels when compared to working outside the home.
What many home business owners may not realize is that basic homeowner?s insurance does not cover home related businesses. Additionally, personal auto insurance does not protect drivers for business use of vehicles. It is important to protect all the time and investment that goes into building a business. The proper insurance coverage fully protects that hard work from unexpected accidents, mistakes or even damage to other people?s property.
Many home professionals may also not recognize that when it comes to company protection size does not matter. In fact, commercial insurance for home business is needed more than ever since a large liability award could potentially bring financial devastation to small business owners.
As more people begin to work from home, companies and organizations are also becoming aware of the need to make sure that when they contract with a small home based company, proof of insurance is a necessity. In order to win contracts with these companies, small home businesses will want to make sure adequate general liability and property insurance is in place. Being prepared with proper licensing, insurance and experience will enable a small business to differentiate itself from other companies in competing for potential job contracts.
Another important reason home businesses must purchase commercial insurance is in cases of emergencies or disasters such as fire or flood that cause extensive damage to the home. Not only will business owners need a place to live, but their companies would be affected by not being able to continue operations. Homeowner?s insurance would cover damage to the home, but it would not provide any security for the business. The ability to survive business interruption is limited for small home business owners so having adequate insurance protection to cover expenses and loss of income can mean the difference in staying in business or closing the doors permanently.
The increase in home based businesses has led many insurance companies to offer riders and endorsements to home owner policies in order to provide the extra protection needed for home and office. An insurance broker professional can assist businesses in evaluating potential risks and properly assess if homeowner endorsements or other related packages are adequate enough to protect or if separate policies are needed to fully insure the operations.