Do You Run a Business From Your Home?

Staying in touch
Volume 16, Number 2
Insurance Brokers Association Canada

One responsibility of running a home-based business is maintaining adequate insurance. A recent study found more than half of home based business owners are underinsured and nearly 40% of those they surveyed thought their homeowner’s policy covered their business.

Don’t assume that because your business is run from your home, your homeowner’s insurance policy will automatically protect you. In most cases it will not. Instead, you need to add an extension to your homeowner’s policy that offers protection against common business risks. Most home business extensions provide coverage in the following areas:

Business Property: Coverage is provided for business property kept on or off your premises. Business property includes inventory, samples, supplies, tools, filing cabinets, computer equipment and software.

Business Interruption: Covers any necessary expenses to continue your business from another location. If your home is unfit to work in due to an insured loss. With this protection, your income is not interrupted and your customer base is maintained. Many businesses fail because they are unable to start up again after a business interruption or by the time they do, their customers have taken their business elsewhere.

Legal Liability Coverage: Insures your business against exposure to any of your company’s products or services, as well as an accident and injury occurring on your premises (e.g. a courier or customer visits your home on business and slips on your steps).

Is your home business underinsured?

Depending on how you answer the following questions, you may want to talk ? us about adding a home business extension to your homeowner’s insurance policy.

• Am I making a product?
• What equipment do I own that is specific to the business?
• How do I use that equipment?
• Do I keep inventory of raw materials and or finished goods?
• Do I have employees?
• Where do I conduct my business?
• Do I perform a professional service?
• Can someone sue me for providing incorrect information or making a mistake?
• If a fire occurs, will it shut down my business?
• Do I use my personal computer for business?

Running a business can be a very rewarding experience. Talk to us if you have any doubts about your home-based business insurance needs.

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