Home Based Business Insurance Is More Important Than Ever

In the wake of the global COVID-19 pandemic, the world has changed in a series of dramatic ways, with many striking changes and effects directly influencing the world of business, and transforming how common professional practice is carried out in the future.

With more and more people than ever before being required to work from home during this pandemic, and with remote working becoming more of a professional norm across a range of different industries, it seems quite clear that businesses and individuals alike need to figure out how to be more effective and organized with this new working dynamic in mind.

Also, an increasing number of people are setting up their own businesses of various sorts from home. Some directly because of the pandemic, and others because of the simple fact that the Internet and other modern technologies have made this more possible than ever before.

According to the Insurance Information Institute, 51.6% of U.S. businesses were home-based as of the 2007 Survey of Business Owners (SBO), and there’s plenty of reason to think that this trend has only been increasing consistently since then.

Considering this, and other developments, home-based business insurance is more important than ever to safeguard both businesses and individuals against a variety of potential mishaps.

Here’s a closer look at why this is the case.

Your Home Insurance Won’t Cut It

If you work from home, there’s a good chance that you might think that home based business insurance is not really necessary, because you have home insurance already and it will cover everything you need it to.

The simple and unfortunate answer is that your home insurance almost certainly won’t suffice in protecting you against the potential issues that could develop for your home-based business.

Here are some reasons your home insurance almost certainly will not be up to snuff.

Home Insurance Policies Won’t Cover Much of Business Property Cost

The standard home insurance policy only covers up to $2,500 of business property, with that number going down to $500 for any business property that’s away from the home premises.

While this may be fine for tiny business expenses, it’s certainly not going to do much good if you run a business from home that involves you storing and sending off stock from the premises, and where an incident like a house fire might cost you a very substantial amount of money.

Likewise, if you have to take certain business equipment away from the residential premises regularly in order to do your job, such as an expensive camera, microphone, or other digital setup, the $500 compensation you can expect to receive if something goes wrong will likely be nowhere near enough.

Home Insurance Policies Won’t Cover Structures Attached to Your Home That Are Used for Work

Home insurance policies rarely include cover for “other structures” attached to your home that you may use for work. That means your policy might not cover something as straightforward as a stand-alone garage that you keep goods stored in or a separate addition to the home that you use as an office space.

This means that anything that happens to your business, and the things that you need in order to keep it running effectively, will go uninsured, even if your home insurance policy hypothetically claims to cover certain business expenses.

Protect Income Against Factors Beyond Your Control

If there’s one thing that the pandemic has made very clear to businesses operating across all different industries, it’s that there’s a real possibility of broader global and societal upheavals compromising income for both employers and employees.

The great thing about insurance policies for home-based businesses is that they often specifically include Loss of Income Coverage, Workers Compensation Insurance, and other related elements, which can keep you safe for as much as a year regarding things like covering employee wages, recouping lost income, having certain work done, or having to deal with particular complications.

Very few home-based businesses, especially small family-run businesses, want to get rid of employees at the first sign of trouble. Unfortunately, without the right insurance policy, it can be very difficult to keep all your employees on the payroll until things get back to normal. With home based business insurance, you won’t have to let them go at the first sign of trouble.

Be Able to Expand Your Business and Thrive Without Excess Stress

Even if your current home insurance policy seems to provide enough coverage for your current needs, there’s a genuine risk that any growth in your business might put you outside of the range where the level of coverage will be appropriate.

Ultimately, every business owner wants to maintain a decent level of autonomy with their business, and to ensure they have the best possible chance of developing it and seizing opportunities that come along, as and when they arise or see fit.

It’s difficult to achieve this if you are worried about just how much your insurance policy will actually cover when push comes to shove. Signing up for a proper home based business insurance policy can go a long way to grant you the freedom to expand your operations.