Types of Business Insurance
Whether or not you need these types of home-based business insurance depends on what kind of home-based business activities you're engaged in. For instance, do you use your vehicle for business purposes? If so, you need to have your vehicle properly insured for business use to cover any damage to your vehicle and to cover your liability to others if you're involved in an accident. Does your home-based business involve selling a product? Then you should consider getting product liability insurance to protect your business from liability resulting from the product's nonperformance. Does your home-based businesses provide services? If so, you will definitely want some kind of liability insurance. Professional liability insurance protects both you and your clients. If a client claims to have suffered damages through your actions as a professional, your professional liability insurance will shield your personal assets and pay for your defense against such a claim. Such coverage also ensures that a client who has suffered damages will be adequately compensated.
There are many different types of professional liability insurance that home-based business owners may need. Malpractice insurance protects you from damages caused by a treatment that goes wrong. While we immediately tend to think of professionals who provide medical and health-related services such as doctors, dentists, and physiotherapists, when we think of malpractice insurance, there are actually many other home-based practitioners who may need such insurance, ranging from hairdressers through dog groomers.
If your home-based business involves being paid to give professional advice, you need errors and omissions insurance. If a client claims that he or she has suffered damages because your advice was inadequate or incomplete or because of a negligent act on your part, error and omissions insurance will cover your defense and the damages awarded to the client if the case goes against you. And if your home-based business involves providing services at client sites, you may need completed operations coverage to protect you from liability that could arise after you have left a client's premises, when your client starts to use whatever you were working on and injury or damage occurs.I also strongly urge all home-based business owners who depend upon their business as a source of income to consider buying disability insurance, which will cover your lost income if you're disabled and unable to carry on your business.
You may also want to consider purchasing business interruption insurance, which will cover your lost revenue if you're forced to suspend your business activities because of fire, flood or other disasters. But if you've investigated the cost of even one of these types of insurance that you think your home-based business needs, you know that business insurance isn't cheap. How can you cut your costs on home-based business insurance? Read on...
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