Insuring Your Home-Based Business

According to Statistics Canada, in December 2019 the amount of Small Businesses in Canada accounted for 97.7 percent of the total Businesses in operation in Canada. Due to COVID-19, It’s no question that many small businesses in 2020 and 2021 have made new arrangements for themselves or their employees to work from home.

Do I need Home-Based Business Insurance?

There are many associated risks with starting a new business, and protecting your investment can be an overwhelming task – but what if you are operating your business out of your home? Or what if your Home Insurance policy doesn’t qualify you to run a home based business?Am I qualified?Contact your Personal Lines Insurance Representative to find out if you are eligible. The truth is, owning a home based business can be accompanied by additional risks and factors that are important to consider:

– Your essential equipment breaks down

Your standard home insurance policy will cover items related to the ownership of your home, but may not extend to cover damages or major equipment break downs related to your home-based business. To make sure your equipment is back up in running within a timely fashion, it is important to have a home-based business insurance plan.

– Your inventory is stolen or damaged

In the event that your inventory is stolen or damaged by flood, fires, and other accidents, or the products you sell cause injury and/or damages – knowing that you have the right Product Liability Insurance to recuperate your losses is crucial to the success of any business.

– There is a dispute over works completed with a customer

If a customer notices a mistake with the work you have done for them, it is possible they may involve a lawyer and/or move to sue if there was a reputational or financial loss. If your business is paid to offer professional advice, you will also need Errors and Omissions InsuranceErrors and Omissions InsuranceErrors and omissions insurance (E&O) is a type of professional liability insurance that protects companies, their workers, and other professionals against claims of inadequate work or negligent actions. so that you are covered in the event that incorrect advice results in a reputational or financial loss.Reputational RiskReputational risk, often called reputation risk, is the potential loss to financial capital, social capital and/or market share resulting from damage to a firm's reputation. This is often measured in lost revenue, increased operating, capital or regulatory costs, or destruction of shareholder value.

– A customer suffers an injury on your property

If your home-based business involves customers going to or from your home address – it is important to make sure that you are prepared with General Liability Insurance in the event that a customer sustains an injury while on your property. 

The bottom line

If you have customers coming to and from your house – you need home-based business coverage. At the very least, you will need an additional endorsementAdditional EndorsementAdditional forms attached to the policy that modify it in some way, either unconditionally or upon the existence of some condition. for coverage regarding office equipment and business supplies. If you expect neither of these, and are not expecting to store inventory – it’s important to know that an insurance policy can also cover other important liabilities such as business continuation expenses, loss of money, and off premises business property.

Contact one of our Commercial Insurance Representatives today if you have any questions or concerns regarding your Home-Based Business Insurance.