Many home based business owners and consultants are startled to discover, often only after it’s too late, that their homeowners insurance does not cover the needs of their home based businesses. With some policies, you may even find that having a home based consultancy business negates your home insurance policy. That’s why it’s so important to consult with your insurance company to make sure that you have the right policy to meet your personal and professional needs.
What Kind of Home Business Insurance do You Need?
The exact needs of any consultancy business varies greatly from one business to the next. There are several different types of policies though, that you may need in addition to your standard homeowners insurance policy, like those discussed below.
General Liability Insurance for Home Based Businesses
This type of policy protects you from personal liability claims made against you and/or your home based business. It also provides coverage for damage to the property of other people that may have been caused by your business or the tools you use to conduct your business.
Professional Liability Insurance
This policy is of particular interest to people who serve as consultants. It helps to protect you from claims regarding the professional services, advice, or information you provide. Another common name for this type of insurance coverage is errors and omissions insurance and it is a necessity for businesses that deal in advice today – even if you haven’t made an error because it helps to cover the costs of your defense and any awards that are made up to the coverage total.
Incidental Business Endorsement
Some insurance companies do not require you to take on a standalone policy – depending on the size and scope of your business. In these cases, they may allow for a small endorsement that offers general business liability coverage and replacement costs for lost equipment in your designative office space. This usually does not cover inventory unless specified and is an add-on type of coverage meant to supplement your homeowner’s insurance policy.
Business Owners Policy for Home Based Businesses
This is a basic policy for business owners, sometimes called a BOP, that offers some degree of liability coverage along with protection for business equipment and, in some cases, inventory if you have some on hand. Types of equipment covered by this policy include: office furniture, computers, tablet devices, printers, copiers, fax machines, and more.
Workers’ Compensation Insurance Coverage
Make sure you know the laws in your state about workers’ compensation insurance coverage and that you’re meeting those requirements in your home based business or you could face substantial, life changing and potentially business-ending repercussions if something were to happen to one of your employees.
Don’t wait until after the fact to try to find out if your home based consultancy business has adequate insurance coverage. Contact us here at BOLT Insurance Agency, today to find out for certain.