If you have a home business, you need to get insurance. There are a number of benefits that come from having the right insurance and it is very important that you have certain insurance policies. When you understand the importance and benefits of insurance for your home business, you will better understand why you need to get these policies.
Table of Contents
You Will Be Operating Legally
The primary benefit of insurance is the fact that your home business will be legally operating. Depending on where you live, there are certain insurance policies that you have to get to adhere to the law. If you do not have the right insurance, you could face fines, civil penalties, criminal penalties, be excluded from public contracts or be shut down.
If your home business employs other people, you will need to have workers’ compensation as well as unemployment insurance. Depending on your state, you might have to get other insurance such as disability insurance. The penalties that you face with generally be much greater than the cost of your insurance policies.
You Are Covered When You Are Sued
Society has become litigious and you need to consider this. There is always the chance that your home business will be sued for some reason. If you run a professional service business, you could face a lawsuit when advice that you give does not go very well or as it should.
When you have professional insurance you will be covered for these times. Insurance will take care of the costs associated with being sued and you need to consider this. The costs of a lawsuit could bankrupt your business and this will be the last thing that you want to happen.
There are a number of different insurance policies that you need to get to ensure that you are completely covered. Professional liability insurance is a must for any consulting business or anyone who offers advice to their clients. There are other liability policies that you may need to get based on the business that you conduct.
Protecting Your Business From Disasters
When disaster hits, you might imagine that your home insurance will cover your business. This is not actually the case because your business will generally be excluded from the coverage of your home insurance. If you look at your home insurance, you will generally see a clause that states that commercial goods will not be covered. These commercial goods will be anything that is related to your business because it is a commercial enterprise.
If your home is damaged by a natural disaster all of your business goods will be lost and you will not get an insurance payment to cover their replacement. Commercial insurance will cover your business goods in the event of a disaster. This will ensure that your business can continue to function after the disaster and you will be able to replace all of your business goods.
BOP or Business Owners Insurance will generally provide the coverage that you need. Not only will this insurance replace your goods which have been damaged, but it will also provide insurance against loss of income. This is something that your business needs to have if you want to continue after a disaster.
Loss of income insurance will provide you with an income when your home business is not able to function. If your home is damaged by a natural disaster, this insurance will continue to pay your business an income until you are able to function again. Of course, there will be some limitations to your insurance and you need to be aware of this.
Your Business Is More Credible
When consumers look for businesses to hire, they will consider whether or not you have insurance. Consumers will be more likely to work with a business that has insurance because they know they will be covered. They also know that you are taking your business seriously.
When your business is more credible, you will get more business which ensures that you can stay open for longer. Consumers will view your business as a safe bet because if anything happens you will be able to compensate them. This is one of the reasons why many home-based businesses will state that they are licensed, bonded and insured. After all, trust is the foundation of any relationship between consumers and businesses.
You Can Close More Contracts
Many people do not realize that there are a number of business contracts that require you to have insurance for them to be closed. One of these contracts will be when you want to borrow money to cover any business operations or expansions. The loan agreement that you sign may stipulate that you need to have certain insurance for you to be eligible.
There are certain client contracts that will also require you to have insurance. If you are going to tender for any public contracts, you will have to be insured and bonded. Without proof of this, your tender will not be accepted.
Future Proofing Your Business
The last benefit of insurance that you need to know about is the fact that you are going to be future proofing your business. You never know what the future is going to hold. Being insured will protect you from anything that could happen from damage to lawsuits to business expansion.
It is important that you future-proof your business to ensure that you always have the space to expand. You might not see yourself expanding your business right now, but you might want to in the future.
There are a lot of different benefits that you get from commercial insurance and you need to know what they are. Of course, the benefits that you get will vary depending on the insurance policy that you have and the limits of it. It is recommended that you talk to a professional insurance advisor to better understand the insurance that you need to have to legally run your business. This will vary depending on your industry and location.