A Guide To Home-Based Business Insurance
Have you recently started, or are thinking of starting, a home-based business or a part-time side hustle? It’s exciting to get things up and running, but did you remember to protect your new business from risks?
There has been an uptake in the entrepreneurial spirit of Ontarians since the pandemic, but many people don’t understand the complexities of their homeowner’s insurance policy. New business initiatives might not be included in your standard home insurance policy.
At The Ostic Group, we’re happy to help review your policy, fill in any coverage gaps, and give you the right advice for your home and your new home-based business. Here’s what to consider when it comes to insuring your new venture:
Do you need home business or side hustle insurance?
As inflation and the cost of living continues to rise, more and more people are choosing to work for themselves and start their own business, often in addition to working for an employer. Many are also choosing to operate these businesses in their homes as it allows for more flexibility, a better work-life balance, and it helps with location costs when you are just starting out. So, the pressing question is: Do you need insurance for your home business or side hustle? The short answer is yes, and here’s why:
- Protect your dreams: Your home business or side hustle represents your dreams and ambitions. It’s a reflection of your hard work, creativity, and dedication. You’ve poured your heart and soul into it. Now, imagine all that effort suddenly jeopardized due to an unexpected event, such as a liability claim, property damage, or a legal dispute. Insurance safeguards your financial investment, your personal assets, and, most importantly, your peace of mind.
- Mitigate potential risks: You might be unaware of certain liabilities, legal obligations, or property protection needs specific to your type of work. Insurance can cover personal liability and possible issues that come up over time.
- Have peace of mind: Entrepreneurship comes with its share of uncertainties. The peace of mind that comes with knowing you’re covered in the event of unforeseen challenges can be a game-changer for your mental well-being and your business’s long-term success.
Understanding the type of home-based business coverage you need
When it comes to home-based businesses, insurance needs can vary significantly based on the nature of what the job entails. There are several types of insurance coverage options that you might want to consider, including:
Homeowner’s Insurance
Your standard homeowner’s policy will not automatically cover business-related losses. It is vital to discuss your home-based business activities with your insurance broker to understand the limitations of your existing policy. Having a non-disclosed business could interrupt, affect, or prolong an unrelated home claim if the insurance company was not previously aware. This really can be a big deal.
Business Property Insurance
This type of insurance can protect your business equipment, inventory, and supplies against theft, damage, or loss. These are not covered on your standard homeowner’s policy, so you need to purchase proper coverage to ensure these often expensive assets are safeguarded.
Liability Insurance
This is crucial for any business, including home-based ones. It protects you in case someone is injured on your property, or if you unintentionally cause harm or damage to someone else’s property during your business activities.
Professional Liability Insurance
If your home-based business involves providing services or advice, professional liability insurance can protect you from legal claims and disputes arising due to errors, negligence, or inadequate work.
Not all home-based businesses are created equal
Not every insurance company is willing to include all types of businesses under their standard homeowner’s policies. Certain businesses carry higher inherent risks, and insurance companies may find these risks incompatible with the typical coverage offered by homeowner’s policies.
For these types of businesses, you will likely need a completely separate business package from a home-based business endorsement on your homeowner’s policy. Talk to your broker about your specific business activities to know what types of policies are available to you, and which ones are best for you and your business.
Additional insurance coverage tailored to your business operations
The beauty of insurance lies in its flexibility. Policies can be customized to suit your particular business needs. As an entrepreneur, consider the following when tailoring your coverage:
Business Interruption Insurance
This coverage can be a lifesaver in the event of certain disasters or unforeseen circumstances that force you to temporarily close your business. It can compensate for lost income during the downtime to ensure your business can get back on its feet swiftly.
Cyber Insurance
In our digital age, businesses, regardless of size, are vulnerable to cyber threats which can be costly to your business. Cyber insurance protects your business from things like data breaches, cyber-attacks, and other digital risks.
Whether you’re starting a new venture or have been in business for years, talk to your broker at The Ostic Group to ensure you have the proper protection when working from home and beyond