Owning a home-based business has a lot of perks. You enjoy flexible working hours, lucrative tax benefits, reduced overhead costs and have the ability to scale up or scale down quickly.
But the many benefits of a home-based business don’t mean this venture is risk-free. As with any traditional business, home-based businesses can be sued or lose property unexpectedly. Fortunately, there is a wide range of insurance types to protect home-based businesses against these dangers.
In this post, we’ll take a look at four types of insurance a home-based business owner must have.
Professional Liability Insurance
Professional liability insurance. Also known as errors and omissions or malpractice insurance, is one of the most important types of insurance you need. It covers your legal costs when a client sues you over breach of contract, missed deadlines, defects, inaccuracies, and mistakes. This type of insurance also ensures that a client who has suffered damages is adequately compensated.
It is important to note that there is no one-size-fits-all policy for professional liability insurance. Each type of business has its own set of concerns that will be addressed in a customized policy written by the insurer.
Comprehensive Health Insurance
Health insurance is another important coverage every home-based business owner must have. It covers medical and rehabilitation costs when injured on the job or get sick from doing your job.
While your personal insurance cover and government health care plan provide coverage for your health expenses. They do not cover costs arising from on-the-job accidents. This makes it important for a home-based business owner to purchase a comprehensive health insurance policy.
If you use your vehicle for business purposes, you should consider taking out commercial auto insurance. This insurance policy protects your vehicle against damage and collision. Additionally, it covers third-party liability in the event of an accident.
Home-based business owners involved in buying and selling motor vehicles, supplying spare parts and repairing and servicing vehicles should consider getting motor trade insurance. This type of insurance provides coverage for the loss or damage to vehicles the motor trader has or has responsibility for.
Business Interruption Insurance
Business interruption insurance is a type of policy that compensates a business for the loss of income after a disaster or catastrophic event. It’s important to mention that this type of insurance is different from property insurance. While property insurance pays for the cost of repairs or rebuilding, business interruption insurance pays for lost income during the time your business is out of commission.
By having the right insurance coverage in place, your business can avoid a big financial loss due to a lawsuit or catastrophic event. Make sure to check with your insurance company to find out what type of insurance is best for your business.