Many people find that running their business out of their home office offers an excellent opportunity to grow a business without having to worry about many of the expenses associated with renting or owning commercial property for your business. Even as you set up your small business in the home, however, you need to consider the importance of finding insurance coverage. Depending upon the plan and your business needs, insurance coverage can protect you and your home in the event of various problems.

We will review what you might find that your business needs. There are a variety of different types of insurance that might apply to your business depending upon your industry and how you run your small organization. Consider carefully which factors apply to your business as you make your decision.

What Is Business Insurance?

Business insurance provides business owners with protection for their personal assets and their business assets in a variety of different situations that might arise for an organization. A business owners policy will work to protect you from problems, such as:

  • A customer comes to visit you at your home and trips on the front step when coming inside. They broke a bone and now want to sue your business to recuperate the cost of the health expenses.
  • You drive your vehicle on behalf of your business, going to provide a service for a customer. Unfortunately, there is an accident and both cars involved are damaged. Professional coverage of your car can help you avoid situations where your standard car insurance avoids paying because the vehicle was used in an official, professional capacity.
  • A customer hires you to perform a certain job but then claims that you made a grievous error. Insurance can help protect you and your assets if the customer decides to go after your business in court.

Generally speaking, there are a few key areas of insurance that you will want to consider to see if they apply to you and your business. The different coverage options that you can select and the ways you customize them to fit your needs will impact the final insurance cost. Let's explore some of the most common areas where business owners will want insurance.

What Types of Home Business Insurance Do I Need to Consider?

To know the types of insurance you need to help you with your home office, you need to start by understanding precisely what the different plans cover. This includes outlining what the insurance company lists as its coverage limits and exclusions. Knowing not only what the plan says it covers, as well as the known significant exclusions, can help you better understand your coverage and how to make sure it provides you with the protection you need.

Here are a few significant types of insurance you will want to think about for your small business.

General Liability Insurance

An insurance agency will issue a general liability insurance policy to help you gain coverage for a few different potential injuries. This type of policy helps to protect you even if the product you sell somehow causes injury for the customer. It can also help in situations such as injuries to you or a customer. If you rent the room where you run your business, then it can also help if the landlord's property ends up damaged by something related to your business.

Given the wide range of situations in which securing a general liability policy will help businesses remain protected, most organizations should make sure that they have one of these policies in their portfolio.

If you see customers on your property, and thus risk them injuring themselves or their personal property on your property, you need to carry this insurance. Consider the problem that would arise if a trashcan blows in your driveway and noticeably dents a customer's car. You need coverage to help you manage the costs associated with damage to their property.

It is important to note that this liability coverage does not provide you with coverage if it is an employee who gets hurt or if you make a purposeful or professional mistake in the final product or service you produce. These gaps in coverage play an important role in why your business will also likely need other types of policies to keep you fully protected.

Many professionals will combine their commercial property insurance and their business income insurance with their general liability coverage to create a Business Owner's Policy. Commercial property insurance provides additional coverage for the physical location of your business and any equipment you own for your business. The income insurance, on the other hand, helps business owners if they encounter a problem — such as a natural disaster — that forces them to stop working temporarily.

Professional Liability Insurance

Professional liability insurance, also known as omissions insurance, can greatly benefit small business owners in a variety of situations. This type of small business insurance is designed to provide business owners with additional protection, even if they make a professional mistake or error.

Professional services can become a challenge when determining liability. For example, if you promise to deliver a particular group of ads to a customer but they do not perform as expected, the customer can become frustrated and declare that you made a mistake. Even if you did nothing wrong, no professional wants to worry about the expenses associated with defending themselves against this claim. Professional liability insurance protects business owners in situations like this.

When securing professional liability insurance, business owners will need to be careful and ensure that they select a policy that aligns with their specific tasks within their industry. This will help them get the most protection possible out of their plan.

Increased Business Property Limits on a Homeowners Policy

When customers decide to use their personal property for business purposes, they often mistakenly believe that their homeowners insurance should help protect them. This common error and objection to purchasing more coverage must be cast aside.

What many people do not realize is that their homeowners' insurance limits the amount of coverage provided for business purposes. For example, it may have enough to cover basic business equipment — such as computers and a desk, but it does not have enough to help cover larger expenses.

Fortunately, many insurers will help customers secure additional funds for their homeowners' insurance policy, which will provide them with additional protection against property damage to equipment for their business. Those working from home will appreciate knowing that their business equipment and material is fully protected.

Those interested in adding additional property coverage to a home business policy can speak with an insurance agent who will walk you through the important parts of business liability for the home. This will help you ensure that you secure enough coverage to protect the items needed the most.

Other Types of Insurance That Might Apply

There are also other types of business insurance coverage that you might want to consider getting an insurance quote for to learn the current pricing. The need for these types of policies will vary depending upon factors related to your business.

  • If you drive a car in an official capacity for your business, you will need to make sure you have a commercial auto insurance policy. The auto policy will come into play if you have car struggles related directly to the use of the car for business.
  • If you have employees, you might also want to consider workers' compensation insurance. If your employees have a work-related injury or illness, this type of insurance will help you continue to provide benefits for them. Your ability to provide them with this type of insurance will benefit you tremendously as you build your relationship with your employees.
  • Data breach insurance. Cybercrime has become an increasingly important topic for businesses of all sizes. If your business deals with a lot of sensitive data or collects large amounts of customer information, then you might want to consider protecting yourself and your customers with data insurance.

Track Your Insurance Expenses With Skynova

As your dream becomes a reality in your small business, you want to make sure that you have the coverage you need to protect your business and yourself. As you purchase the insurance policies, however, you also need to carefully keep track of the expenses associated with them. Fortunately, Skynova was designed for businesses just like yours. You can turn to Skynova to easily record your receipts, track your expenses, and maintain a clear understanding of the state of your accounting and finances. With an outstanding library of articles to help you understand small business accounting, as well as free templates to help you simplify billing clients, Skynova helps businesses grow every day.

Come and see the importance of working with an accounting platform that was created to serve businesses just like yours. Spend less time managing your accounting and get back to building your business. See how simple it is with Skynova.

Notice to the Reader

The content within this article is meant to be used as general guidelines for small business home insurance and may not apply to your specific situation. Always consult with a professional accountant to ensure that you're meeting accounting standards.