Does Your Home Business Need Insurance?

Hey, it might only be a one-person operation, but home-based entrepreneurs should determine whether or not they need insurance.

In a recent article on Entrepreneur.com, freelance writer Carol Tice discusses the need for insurance for home based businesses. Tice describes how, while writing a story on general business insurance, she realized her own business was in need of coverage. Tice shares the information she uncovered from experts and the advice she received regarding insurance for home based businesses.

The article is particularly interesting in today’s climate of growing entrepreneurs. Many people are looking for income options today and many are turning to their own business ideas. This has created a slew of internet and small business entrepreneurs.

For instance, Internet training company Net Consult Co. provides e-training for online startups. According to the company, “since small businesses often take a while to get off the ground, owners can save money by working from home. This is convenient for stay at home parents; they can work and watch their children at the same time.”

Tice describes the running of her own home business and the insurance she got for the business. Tice has worked as a freelance writer since 2005. Additionally, her husband runs a videography business from home.

The camera equipment that her husband uses is valued somewhere around $10,000 and it all sits around the home. There are visitors that come to look over their video footage and delivery men making deliveries to the home. According to Tice, this situation is a liability nightmare as none of that is covered with homeowner’s insurance.

Tice says one expert told her, “If a UPS man slips and falls on your porch making a business delivery you have no coverage.” This combined with the possibility of equipment being stolen or damaged created an urgent need for insurance coverage.

According to Tice, the answer for most small business owners is a Business Owner’s Policy. The policy typically costs around $500 and gives the business $2 million in coverage. The policy covers loss, theft, injury and other liabilities. It only takes minutes to set up and can typically be done through the same company that handles the homeowners insurance. It is noted that adding a rider to your current homeowner’s policy will only cover several thousand dollars in damages and that amount does not compare to the $2 million in coverage from a business policy.

Tice added as another benefit of having the business insurance the possibility of getting high paying jobs. Tice writes, “I just got a freelance job writing with a major government agency, and they required that I show proof of insurance. Without it, I wouldn’t have been able to get a contract worth over $10,000.”