Q: Do I need
extra insurance to cover my home-based businesses, aside from my
regular household insurance?
A: The short answer is YES!
However, what you need depends upon the kind of business, the
location, and the kind of coverage you want.
Your homeowner’s or tenant’s insurance policy will
probably include public liability as well as fire and theft
coverage. But this insurance probably would be invalid if you made a
claim because of your home business. Each policy is different, so
read the fine print.
Be sure to inform your insurance agent that you
are starting a home-based business, in order to protect your personal
coverage. In some cases, a new commercial policy may be required,
depending on the type of business and the risk involved. In other
cases, the basic policy can often be supplemented to provide the
extra coverage at a minimal cost.
If you are producing a product, you might want to
consider product liability protection in case someone were to sue
you for damages resulting from use of your product. You may also
find that exhibiting in a large trade or consumer show will
necessitate public liability insurance as a prerequisite to renting
exhibit space.
As a self-employed person, you might also want to
consider disability insurance, which provides income if your work is
interrupted due to a major illness or injury.
Also available are various types of life insurance
which, for instance, can provide funds so that, when you die, the
disposition of your small business is handled according to your wishes.
Insurance can provide cash to liquidate or continue the business
until it's sold, or to buy out a partner's share on the death of
that person.
Insurance is a complex topic, especially when it comes to small
and home-based business. So consult your
agent to define your own particular needs. Don’t take any chances.