Home Based Insurance Coverage
When you start a home-based business, buying insurance may not be your first priority, but you cannot afford to ignore it either. When the unexpected happens -- and it will -- having insurance coverage may mean the difference between the success and failure of your home-based business.
You may not require all types of insurance listed here, but taking some time now to consider your insurance needs can save you money and headaches in the future. Ultimately, after reading this article, the best way to determine your complete needs is to consult with an insurance agent. Explain to them the details of your home-based business and he or she should be able to determine the best insurance coverage for you (and any employees you may have). Many small businesses aren't in a position to pay for insurance coverage for their employees, so an alternative is to offer supplementla insurance, such as a product like Aflac, where the employee pays for the premium out of their paycheck and while supplemental insurance doesn't cover all of the expenses for doctor's visits, it does offer a payment based on a rating chart for each incident. This can help defray the cost of medical expenses.
Health insurance should be the first consideration for yourself and any employees you may have. If you have just left your current job to start your own business, you may be eligible for COBRA, which will provide temporary interim coverage. This will keep you covered while you search for the best health insurance policy.
Disability insurance will guarantee that you have some income should you suddenly become unable to work because of injury or illness. Having this extra peace of mind is almost always well worth the extra money you pay.
Life insurance will help ensure that your family has the money it needs should you meet with an untimely death. Some lenders require that you have life insurance before they'll issue a loan; this guarantees that the loan will be repaid in the event you pass away before the end of the loan terms.
Business Property Insurance
Business property insurance helps protect you against loss of inventory or equipment. If your business equipment or inventory is damaged in a flood, fire, or other disaster, this type of insurance will allow you to recoup your losses. This can be critical and is highly recommended. No one expects a catastrophic event to occur, but if your livelihood and family relies on the ability of your assets to generate income for financial sustainment, this MUST be considered! Not only could a fire wipe out your assets, which will be an emotional and stressful event, but if this also affects your ability to earn an income, you do not want that added stress. You will want to get your business up and running as quickly as possible and insurance will ensure you are able to reacquire the necessary assets to get you up and running, and back in business as quickly as possible.
General Liability Insurance
Comprehensive general liability insurance is necessary for your home-based business if you plan on having clients or customers visit your home. Whether you plan to hold meetings, allow customers to pick up merchandise, or have members of the public enter your home for any other reason, this insurance will protect you if someone is injured while on your property. This insurance will typically pay for your legal defense should you face a lawsuit as the result of a fall or other damage that occurs on your property.
Business Interruption Insurance
Business interruption insurance will help your business recover from natural disasters. It will cover you for income lost during the disaster, and will pay for operating expenses that continue to accrue, even though your business isn't up and running.
Workers' Compensation Insurance
Workers' compensation insurance is an absolute necessity if you plan on having employees working out of your home. Without workers' comp, you'll be responsible for any medical expenses arising from injuries employees sustain while working for you. Many home-based business owners mistakenly believe that this type of insurance is only required by businesses that have a retail or separate location, but that's not the case. Another mistake is assuming that only "dangerous" employers (such as construction or movers) need this type of insurance. But what if your employee slips on the stairs or their chair breaks? While those are both unlikely, they are possible and the less risky your business, the cheaper the insurance will be. Anything can happen, it really is better to be safe than sorry. You don't want to be tied up in litigation, paying for an attorney, as a result of a situation like this.
All of these insurance products can help ensure that you are prepared to face almost all situations that might occur while you are running your own business. Disasters, accidents, and crises can strike at any time. By preparing now, you may be saving you and your company (and your family!) significant financial loss, wasted time, difficulty, and additional stress that comes with any of these situations.