There are many benefits to running a business out of your home. For one, your overhead can be much lower than if you rented or purchased office space. There’s no additional costs, other than some furniture and equipment. Not only that, but your commute takes you seconds, as opposed to minutes or hours. Many entrepreneurs love the flexibility and convenience of working from home, not to mention being able to make lunch fresh, and avoid boring water cooler conversations.
However, operating from home does not mean that a business should forego all professional responsibilities and costs. One of the biggest questions for home business owners is in regards to insurance. Do you need business property insurance if you run a home business? The answer is absolute yes.
What is Business Property Insurance?
Business property insurance, also called commercial property insurance, provides coverage for property that belongs to your business. This can include any number of things, from the building in which you work, to your equipment, to fixtures and signage on the exterior. Depending on the policy, it can protect you from the financial consequences of many perils, such as fire, water damage, vandalism, theft, and lightning, among other things.
Commercial property insurance will provide reimbursement for replacement costs of your property or equipment if it is damaged beyond repair. Otherwise it will provide repair costs so that you can get it repaired. The most important thing to remember as the owner of an at-home business is that your personal homeowners policy is meant to protect your personal items. It is not meant to protect things that are connected to your business. If you are a renter, your landlord’s policy will not protect your business property either. Luckily, you can add business property insurance in minutes online if you do not already have a policy. Here are the biggest reasons why you need business property insurance for your home business.
Keep Your Business Afloat
If something bad happens to your home or office, it will significantly impact your ability to do business. For one, you may have damage to the space where you operate, as well as damage to your laptop or other equipment. If you have a home business, then it probably can be categorized as a small business. That means that you have less of an ability to absorb big repair or replacement costs.
No matter what happens, commercial property insurance will make sure that you get those costs covered so you don’t have to dip into your business savings or even personal savings. Your personal insurance policy will cover your home and possessions, but it will not cover your computer, printer, furniture, or space in your home that has been set aside for work purposes.
As a small business, you can’t afford to be down for too long after a negative event. One of the best benefits that comes with business property insurance is business continuity coverage. This protection will provide you with compensation so you can keep your business in operation while your home office is being repaired or your equipment is being replaced. That way a bad situation doesn’t have to get worse.
Business Credibility
When you run a small business, your credibility is everything. If your clients can’t trust you to deliver, they will find someone who they can. You don’t have a huge marketing budget to make up for a lack of credibility. Having the proper insurance will make your business look professional and present a credible image. Your customers and partners will appreciate the fact that you will have a way to honor your commitments even if something bad or unexpected happens.
Business Interruption
Yes, you can get coverage to help with costs to get back up and running, but there will still be a delay in the meantime. What about the revenue you would have made had you not suffered from a peril? Business interruption will provide you with compensation for your lost revenue and income so that you can keep paying the bills while things are in a holding pattern. That way you can hit the ground running without any partners or utilities needing back pay.
Peace of Mind
Running a business comes with a lot of stress and worry, no matter how successful it is. This goes for large corporations and small at-home businesses. If you don’t have the right insurance then you are making the choice to add more things to worry about. A lack of insurance can leave you biting your nails or lying awake at night if there is a rain or wind storm. Or, depending on your neighborhood, you might spend time concerned that your sign will be vandalized. Having protection means that you can rest easy knowing that you are covered.
How Much Can I Expect to Pay for Commercial Property Insurance?
There are several factors that will determine how much you pay for your commercial property insurance. Luckily, being at home will probably save you money when compared to the coverage for a regular workplace. Your insurance provider will take into account how much it would cost to replace or repair your space and your equipment. They will also factor in how old your property is. Older buildings are more likely to have defects and other issues that can lead to further damage. The neighborhood in which you live will also help determine your premium, since some are safer than others, meaning you will be less or more likely to be the victim of crimes and vandalism.
Any business, whether operating from a home or in an office, needs to have the right coverage. Many at-home business owners make the mistake of thinking that they are covered by their personal homeowners policy, when in fact they are not. It will not cover for damages and replacement of business-related equipment and property. If you own an at-home business, then make sure that you get the right coverage so that you are properly protected at all times.
