Do You Need Insurance for Your Home Based Business?

The life of a responsible adult is often fraught with worry. This tends to be more acute for individuals with children, but single adults and childless couples are no exception to the rule. And regardless of your family situation, or lack thereof, working from home could add a host of worries to an already full plate. Of course, work-at-home positions are on the rise, thanks to a decided lack of options in the traditional job market at the moment. And there’s certainly a lot to be gained from such a position. For example, you can skip the morning commute and come to work in your pajamas. You get to be your own boss and set your own schedule. But you’ll also have to pay all of your taxes, you won’t have access to medical benefits, and you might worry about what will happen if for some reason you wind up in a lawsuit. So something you might want to find out, if you’re new to home based business management, is whether or not insurance is necessary.

In truth, there are very few reasons why a work-at-home individual would need business insurance. While the average office has all kinds of liability issues to consider, you will face virtually none of these in your home. That is, of course, unless you have employees or subcontractors working on your property, or you host clients for meetings. Still, your homeowners insurance will likely cover any accidents that occur on your property. You may want to contact your insurance provider to learn the parameters of your coverage, though. It is meant to cover the cost of accidents occurring with guests in your home. But if you have a manufacturing operation working out of your garage and someone gets hurt, you may be surprised to discover just how fast your insurer withdraws coverage. In such cases you might want to secure an additional policy of some sort.

Another potential issue that could require business insurance is the threat of lawsuits for breach of contract. This is combatted easily enough by simply sticking to the letter of your agreements with clientele. But this may not be possible. Or they may sue you fraudulently. With the proper insurance on your side you can fight these cases and you may even be able to steer clear of paying any settlements. However, you might also want to think about setting up a business entity as an additional measure of protection.

Although you work from home, you are still running a business. And if you are sued for any reason (plagiarism, breach of contract, etc.) you will find that as a sole proprietor, your personal assets could be on the line to pay any settlements in a suit. In order to stop potential claimants from coming after your personal assets you need to shield them behind a legal wall, provided when you form some type of corporation (like an LLC or S-corp). Just as you can find discount online vehicle insurance for your car, you can get low-cost policies to protect your home based business. But before you spend the money you should ask yourself if there are other options for protection and if you really need the insurance at all for the type of business you run.

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