As a home business owner, you may be wondering if you need insurance to protect your business, like with some sort of formalised insurance policy. It’s a valid question, and the answer isn’t always straightforward.
People like to say that all businesses face the exact same risks, regardless of their size. That’s a bit of a myth. For instance, small, home-based businesses don’t really face the same risks as that of bigger, more established companies. But what’s absolutely not a myth is the fact that home-based businesses often lack the resources to help them survive the risks specific to them.
In this post, we’ll explore how to know if your home business needs insurance and what types of cover you may need.
Home Insurance Won’t Cut It
First and foremost, it’s important to note that many homeowners insurance policies don’t include cover for business-related activities. This means that if something happens to your home or your business property, you may not be covered if you don’t have separate business insurance.
More worrying is the fact that if someone is injured on your property while conducting business with you, you could be held liable for any damages or medical expenses.
But, and this is a big but, you wouldn’t need business insurance if you only occasionally work out of your study or home office. You know, if you’ve taken a personal day or 2 (or even 3) to work from home.
So, How Do You Know If You Need Business Insurance?
The short answer is, if you work or run your business from your home, then yes, you do need cover. Home contents or household insurance won’t cover any of your business-related equipment, supplies, and other items used to generate your income. For that, you need business insurance to protect your business assets and finances.
But, there are a few questions you can ask yourself to make sure:
- Do you have any inventory or equipment for your business in your home? If you have a home business that requires equipment, inventory, or other assets, you need business insurance to protect those items.
- Do you have clients who visit your home? If you have clients who visit your home for business meetings or to pick up products, there’s a chance they could be injured on your property.
- Are you a licensed professional in a regulated industry? If you’re a licensed professional, such as a lawyer, accountant, or therapist, you may need professional liability insurance to protect you in case of negligence or malpractice claims.
- Are you earning income from your home business? Even if your home business is just a side hustle, if you’re earning money from it, you should consider getting insurance to protect your business and personal finances.
Specific Business Insurance
There are now insurers in South Africa who offer you the opportunity to customise your business insurance policy so that you can get the cover your business needs and avoid paying for things that aren’t necessary.
Here are examples of the specific types of cover you can get for your home business:
- Cyber insurance: A normal business insurance policy won’t cover you from the types of risks associated with a data breach or cybercrimes that steal your financial details or the personal details of your clients. But cyber insurance will, like this product.
- Personal liability: If a client comes to your home and is injured and sues you, personal liability will cover these enormous costs.
- Equipment cover: Different types of equipment require different types of cover for theft or breakdown and this is where it’s handy to select a specific policy for your equipment.
- Business car insurance: Normal car insurance doesn’t cover accidents or theft of your car if you use it for business purposes, so it’s wise to add this policy to your portfolio.
The thing is, you might not know all the things you need to insure, the things you really don’t need cover for, and most importantly, what you don’t need to be paying for. That’s why it’s so important to get in touch with an experienced insurer that can help.