Working from home is growing easier and easier thanks to technology, but running a business from your house requires a little more planning. If you’re thinking of starting a home-based business, you should consider these planning tips—regardless of what industry you’re dealing with. Be sure you’re protecting your information, employees, and longevity with the right business insurance, too!
Before you start, do you have an area in mind? While not everyone has a dedicated home office, being a business owner differs slightly from telecommuting. If you’re storing company equipment here, meeting clients onsite, and/or allowing employees to work from your house, too, then you probably need space for all this! Especially when you’re dealing with expensive tools or technology, it’s best to store those separately from your personal belongings. Not only does it help you distinguish between your personal and private lives, but also it’s a recommended insurance precaution. So, whether you’re able to clear a single room, a garage, or dedicate an entire addition to your business, evaluate your current living situation and plan for an area that allows you to grow.
In addition to your home office space, you’ll also need to consider your storage needs. Are you planning on keeping intellectual property onsite? What about protected personal information (PPI) for your clients? If you answered yes to either of these, you’ll need to invest in some type of security. Previously, this meant filing cabinets, but thanks to massive cloud storage systems, you’re able to keep everything electronically. You just need to have technology that allows you to access everything you need quickly and securely. From an insurance perspective, you may also need additional liability coverage and/or a cybersecurity policy. Just because you’re working from home doesn’t mean you’re investing any less in your business.
Depending on the size and scope of your company, a couple of different policies could work for you. You’ll want to invest in some type of business insurance, since your homeowners’ plan isn’t designed to cover commercial use or belongings. Why risk your newest venture by going uninsured?
For smaller companies, an at-home business policy or even a rider to your existing homeowners’ insurance might be sufficient. The rider is the least expensive option, but it also provides the lowest level of coverage. It’s intended for business owners who store very little business-related materials at home and/or have few visitors. An at-home business policy will typically have slightly higher limits and includes liability protection for a few employees. Just remember, this only insures details related to your home-based business, not your industry practices. For that, you’ll still have to carry an errors & omissions (E & O) policy to protect you against legal liability regarding potential misrepresentation or mistakes. However, both the rider and the at-home policy are great starter options!
As your company grows, you may want to look at a true business owners’ policy (BOP), which is recommended for anyone needing more than $10,000 of coverage. It’s much more comprehensive, including protection for your assets, liability, loss of income (due to an issue with the house) and even business use of a personal vehicle under certain circumstances. It can also extend to multiple locations, so if you outgrow your current space and decide to add another office (while keeping your home business), this might be the best policy for you.
We know you have plenty of things to worry about when managing a home-based business. Insurance shouldn’t be one of them! Let our experience at Freedom Insurance guide you toward the right policies for your home, auto, and business. Our staff will work with you individually to create a plan that best meets your needs. Then, when you have questions, you can find all the answers you need in one place! Call us today to set up your appointment.