Now more than ever, people are turning to themselves for direction and starting up their own businesses. It can be empowering to be your own boss and adhere to your own schedule, but it can also bring a lot of risk—especially if your business deals with clients. Whether you have a physical location or work from home, you will need some form of insurance to protect you and your work materials.
Will Home Insurance Cover My At-Home Business?
Contrary to popular belief, home insurance doesn’t cover everything, and it may not provide compensation for your business materials and equipment if they are lost or damaged due to a disaster. This is because home insurance is designed to cover your physical dwelling and personal belongings. Materials you use for work purposes should be covered under a separate business insurance policy. The most common of these is commercial property insurance.
Commercial property insurance covers the physical assets of your business, including a possible physical location (that is not your home). It compensates you for losses and damages caused by fire, wind, hail, lightning, smoke, explosions, theft, vandalism and more. Work equipment can also be covered under this, but businesses with specialized equipment may also want equipment insurance or equipment breakdown coverage. Equipment breakdown coverage covers equipment your business uses in case they suddenly break down, such as a fridge or freezer in your restaurant breaking down unexpectedly.
Workers Compensation for Self Employed
If you are the only employee, you do not generally need workers compensation insurance. If you employ anyone else, however, you may want to consider workers compensation. This insurance covers injuries employees may suffer on the job. If your employees run errands or do any sort of physical labor for your business, you will want a way for them to pay the necessary medical bills for their injuries. Workers compensation can also protect you from lawsuits concerning employee injuries.
Liability Needs for Self-Employment
No matter where you work, self-employment means that liability for accidents and product accidents will fall directly on your shoulders. General liability insurance can help with bodily injury, property damage and personal and advertising injury that may occur during the course of your work to clients and other third parties. You may also want product liability, which covers injury, property damage and financial loss one of your products may cause a customer.