If you run a home business, home insurance may not be the main thing on your mind at the moment. You’re probably very busy just keeping the wheels turning, and there are other priorities. OK, but there’s something you need to know. As a home business, you really do need home insurance, and plenty of it, for business reasons. It’s when things go wrong that the situation can get very tricky indeed, and you need to know what to do.
The tricky side of insuring your business
Insuring a home business is simple enough. It’s very similar to basic home insurance, but with a few added issues you need to address.
For example: Did you know that if you invite a client for a business lunch in a café, and he slips over and breaks an arm, you can be sued? It may not be your fault, the restaurant may be held liable, and the court may see things that way, but you can theoretically be held liable, because the client was there doing business with you.
A similar court case happened in Australia a few years ago. This case happened to affect a person who was under a Department of Education and Workplace Relations (DEWR) training scheme, and they were sued rather than the trainee, who was conducting business under their training scheme. The result was that DEWR issued a new policy requiring all their future students to get liability insurance.
Not quite what you’d expect, is it? The situation with home insurance for home businesses and self-employed people generally is that almost anything directly related to your home business can be a personal legal liability under various circumstances. You need liability cover. You also need some sort of protection for the legal fees.
Home business insurance issues
Your home business is your breadwinner, and it’s also holding a lot of your valuable equipment, files and other materials. If those materials get damaged or lost, particularly client materials under contract, you may incur liabilities. A client may need to sue, simply to recover costs of materials for which they may be liable. This can involve a lot more money than most people really want to think about, and cover is definitely preferable to no cover in these circumstances.
Contents insurance and home businesses
Contents insurance isn’t necessarily going to cover the value of some things in business, like lost business as a result of a fire, etc., but it can cover the value of a lot of very important things:
• Computers and peripherals
• Commercial materials
• Electrical equipment
• Desks, furniture, and similar contents
• Graphics materials
• Research materials
Please note: The materials referred to here are normal household contents which would normally be part of a home and contents package. If you have high value business materials on the premises or additional business liabilities with high dollar values, you may need a dedicated business insurance package.
If you have a home business, you’re strongly advised to talk to an insurance consultant regarding your business needs. Insurance for home businesses isn’t particularly expensive. It’s also a lot cheaper than the liabilities.