Running A Home Business – Do You Need Insurance?

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Nov 19 2019
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Would you find surprising to learn that 75% of businesses are underinsured? What’s more, 40% of the total of small businesses don’t have any insurance. Some entrepreneurs choose not to insure their businesses because they try to save money, but they don’t know that in the long run its lack leads to higher expenses.


When you decided to launch your business, you transformed your house into your office because you knew it would bring numerous benefits. You don’t have to rent or buy new space, you don’t need to spend money to travel to work, and you don’t spend time on the road. And where do you count the comfort of working from home?


However, even if it’s comfortable to run your business from home, you still have to meet some legal considerations, and one of them is to insure your business.

So, if you were wondering if you need to insure your home-based business, the answer is yes.

Here is why.



The main reason home-based businesses need insurance is that they are at risk of liability. No matter where your business premises are, accidents and incidents can happen, and only insurance can help you deal with the situation. One of your clients or employees can inure themselves when they slip on a wet floor or the products you sell can unintentionally harm one of your clients. It’s always best to have comprehensive coverage, than to hope than your clients will not require compensation if one of your products fails to work.


Try to picture this, one of your clients comes to your house to check the flower arrangements you made for their wedding, and they are allergic to one plant you used. They get to the hospital and their policy doesn’t cover for allergies. You must cover all medical expenses because their visit was business related. Instead of covering medical expenses out of your pocket, the insurance provider can do it for you.


Insurance ensures that your company doesn’t suffer irreversible damage in cases of accidents.


Equipment protection

Lost supplies, equipment, tools or inventory can ruin your business. Consider how expensive all the equipment you use to run your business daily is. Would you afford to lose it? If you are a photographer and your tech gear is lost or stolen one night, you cannot afford to replace the items.


What happens if someone breaks your house and steals your photography equipment the night before an event? Do you have enough money to purchase one the next day? Even if you have savings to buy a new one, it would be a pity to spend them on buying something the insurance can cover.


Uninsured assets are always at risk when running a business from home, but you can protect them with the right insurance policy. The insurance pays your bills and helps you make a living.

Running A Home Business – Do You Need Insurance

Legal protection

Check if your home insurance covers unexpected legal expenses. Most of them do not and you need to get extra coverage. Businesses of all types often deal with negligence claims or with intellectual property theft accusations.


If you are running a consultancy business and you store your clients’ data on your computer, they are vulnerable to security breaches and cyberattacks, and if this happens, your clients can place charges against you. A lawsuit can cost you all your savings and can ruin your reputation.


Home-based businesses are an easy target for lawsuits, so it’s crucial to protect yourself from a situation that can damage your business.


It’s also important to note that entrepreneurs who run home-based businesses are held liable for all claims and damages against their company. If there’s no separation between your company and your business, people can sue you for accidents. Insurance can help you cover lawsuit expenses, and other costs the process may imply.


Mishaps can ruin your budget

Chances are your house won’t survive a calamity, and if you have no house then you won’t be able to run your business. Fire and wind incidents can be costly for a home-based business. When your business is located in an area like Florida, your house can be the target of a weather disaster. Comprehensive home insurance covers the expenses of repairing or reconstructing your house.


Your business’ success doesn’t matter much if a hurricane hits your house. But if you have Florida wind insurance you have peace of mind because your business will survive a mishap. Don’t allow a weather incident to destroy your business. A lost house is a cost no small-business owner can afford.


Peace of mind for your clients

Depending on the specifics of the business, your clients may want you to have proper insurance. You don’t act alone in the industry, you compete with other businesses that provide the same services. When prospects choose between more options, they check multiple factors, and one of them is the insurance policy the company they want to collaborate it has. If they cannot find insurance records, chances are they to choose your competitors.


Let’s say you deliver flower arrangements for someone’s wedding. People pay in advance, but before their wedding you cannot offer the products they bought because a hurricane hit your house, and you have no place where to make the arrangements and no money to purchase supplies. Knowing your business has insurance to protect them in case of an incident brings them peace of mind and encourages them to hire you.


People never worked with a brand they don’t trust, and they’ll make no exception. It’s important to take advantage of all the opportunities you have to prove to your public that you run a trustworthy business.


To understand what type of insurance policy better works for you, it’s recommended to get in touch with a professional broker. As an independent entrepreneur, your insurance will bring you and your clients peace of mind, and will help you make a living even when dealing with critical situations.

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