Entrepreneurs who are looking to make small investments in their business can choose to start a home-based business. National Statistics’ Labour Force Survey estimates that there are 2.43million people in the UK who own a home-based business (Q4 2011). These home-based self-employed workers are the fastest-growing sector of the UK workforce. Their number has increased by 28.16% over ten years.
Home-businesses do not require large capital or a huge workforce. Home-businesses are just like other businesses of a similar size and risk. Every home-based company, regardless of its size, must have insurance to protect their assets and income. Let’s find out why and how to insure a home-based company.
Important importance of home-business insurance
Many business owners believe that they don’t need additional insurance for their home-businesses because they already have home insurance. However, not all home-owners’ or renters’ insurance policies automatically cover a business. Although your home insurance covers your contents, it may not cover your home-office equipment. The same applies to personal auto insurance policies that do not cover vehicles used for business purposes.
This indicates that your home-business does not have adequate protection. You need to insure your home-business to protect it against any unanticipated losses.
Benefits of having home-business coverage
Now that you know the importance and benefits of business insurance at home, let’s take a look at what one can do to get your business insured.
•Claims of negligence: As most of the home-based businesses include companies that offer professional services, such as consultancy advice, design or financial planning, medical or legal advice, a typical home-based insurance policy definitely includes professional indemnity, which protects business owners from the claims of negligence. Clients could file serious legal claims if they receive incorrect advice or services. The business owner can have home-business insurance to cover his defense against these claims.
•Revenues and assets: Business property such as contents, stock, equipment, vehicles, furniture, electronics, etc., is very important for any company. The business’ profits are greatly affected by any loss or damage to these assets. You can protect your business assets from unforeseeable losses by purchasing home-business insurance. This provides coverage against both minor and major losses.
•Coverage for third party injuries/damages: Another advantage of home-business insurance is the protection it offers against third party injuries/damages because of your business activity. Any kind of injury or property damage, as well as manufacturing errors, could lead to substantial compensation claims. An insurance policy will allow you to continue your business without fear of losing it or being sued. The policy covers not only the costs of compensation but also legal fees, allowing you to keep your business running smoothly.
•Medical aid and paid leaves for injured employees: This kind of coverage is optional. You can add this coverage to your policy if your home-business employs workers/employees. This covers employees who are injured while on the job and provides them with medical care. This policy takes the stress out of paying for employees’ hospital bills and medical expenses.
Insurance companies offer a variety of policies to meet the needs of home-based businesses. A reputable and trusted insurance brokerage firm can help you find the right policy for your business. These brokerage firms will help you find the right policy to protect your home-business and allow you to make a wise purchase.
