Working from home isn’t a new trend. Around 10% of the Canadian workforce operates from home, although that number has risen to close to 40% in the first few months of 2020. Freelancers, entrepreneurs, and small business owners may decide to keep their company home-based for several different reasons. For those with families, working from home offers greater flexibility. It also eliminates the need to find an external office, especially if the business owner is also the sole employee.
As freeing as running your own home business can be, it doesn’t come without risk – or legal considerations. If you have a larger business than can be contained in the average home office, you might need commercial insurance to provide you and your assets with the proper level of protection.
Do I Really Need Commercial Insurance for My Home Business?
The answer to this question depends on the scale of your business. If all you have is a home office, and you’re the only employee, you’ll usually be able to find coverage for your home business underneath your existing home insurance policy. Most plans will cover the equipment you need for your day-to-day operations, such as a desk, computer, and office supplies, and some may offer a small amount of liability coverage.
However, not all home insurance policies are designed with entrepreneurs in mind. If you answer yes to any of the following questions, you might need regular business or commercial insurance to properly protect yourself, your business, and your customers.
- Are there multiple employees working within the home space?
- Do you store inventory or products on-site in your home?
- Do clients visit your home for meetings or business purposes?
- Do you run an online store or actively advertise online?
- Is your home vehicle used for business purposes?
- Do you store confidential information from your customers?
What Does Commercial Insurance Protect My Business From?
Commercial insurance is designed to protect you from liability in the event of an accident. For example, if a client were to trip on your front doorstep, commercial insurance would protect you if they were hurt or if their property was damaged as a result of the accident.
Similarly, commercial insurance protects you against liability in the event that someone takes offense at something you say or challenges your credentials. This is especially handy if you’re advertising online, or if you’re running your own website.
If you’re storing inventory or products on-site at your home (or if you’ve rented a storage unit or a commercial space to keep them), then commercial insurance can help you recoup their costs if they’re stolen or damaged. It’s an easy way to make sure that one stroke of bad luck isn’t enough to sink your business and to make sure that you can carry on your work right away.
Special Considerations: Errors & Omissions
If you’re paid to provide professional advice to clients (for example, if you work as a real estate agent, a marketing advisor, an accountant, or a therapist), a special subdivision of commercial insurance called errors and omissions coverage protects you in the event that a client claims your work was sub-standard or negligent. You’ll want to consult your insurance broker as to whether or not you could benefit from errors and omissions coverage, but if it’s recommended, it’s a safety net that will save you from bearing the brunt cost of any court expenses.
How to Acquire Commercial Insurance for Your Home Business
If you think you could benefit from commercial insurance, or if you’d like a professional opinion as to whether or not it would be a good fit for your business, get in contact with Will Marshall Insurance Brokers. With over 30 years of experience providing insurance to Barrie and Orillia business owners and entrepreneurs, we’re experts in the kind of insurance that’s best suited to businesses of every size.
For more information on commercial insurance for your home-based business, including home insurance extensions to cover a home office, give us a call at (705) 726-2551 or contact us online.