Home-Based Business Insurance

Home-Based Business Insurance

The gig economy and side hustles are booming, with more people than ever running small businesses from their homes. This trend has accelerated post-pandemic as individuals seek flexible work arrangements and supplemental income streams. In Canada, home-based businesses range from freelance writing and consulting to online retail and craft production. As convenient as it is to operate from home, it’s crucial to ensure your business is insured against unforeseen risks. Without adequate insurance, you could face substantial out-of-pocket expenses that could jeopardize your business and personal finances. 

 

Why Your Home-Based Business Needs Protection 
Many home-based business owners mistakenly believe their home insurance policy provides sufficient coverage for their business activities. However, standard home insurance policies typically do not cover business-related losses or liabilities. This gap in coverage can leave you vulnerable to significant financial risks, such as: 

  • Property Damage: Equipment, inventory, or supplies used for your business may not be covered if they are damaged or stolen. 
  • Liability: If a client or delivery person is injured on your property, your home insurance may not cover legal fees or medical expenses. Your home insurance may also not cover you if someone sues you for making an error or omission in your business that results in your client suffering a financial loss. 
  • Business Interruption: Events like fires, floods, or other disasters that disrupt your business operations might not be covered under a home insurance policy. 
  • Cyber Breaches: If you handle sensitive client data, a cyber breach could lead to costly damages that home insurance doesn’t cover. 

6 Types Of Insurance To Consider

To ensure your home-based business has comprehensive protection, consider the following types of insurance, depending on what business you have: 

Business Property Insurance: Covers damage or loss of business property, including equipment, inventory, and supplies, due to events like theft, fire, or other specified natural disasters. 
Liability Insurance: Protects against legal claims for bodily injury or property damage caused by your business operations. This includes General Liability Insurance and, depending on your profession, Professional Liability Insurance (also known as Errors and Omissions Insurance). 
Business Interruption Insurance: Compensates for lost income and operating expenses if your business is temporarily halted due to a covered event, such as a fire or flood.
Cyber Liability Insurance: Provides coverage for data breaches and cyberattacks, including legal fees, notification costs, and credit monitoring services for affected clients. 
Product Liability Insurance: If your home-based business manufactures or sells products, this insurance covers claims of injury or damage caused by defective products.
Commercial Auto Insurance:
If you use a vehicle for business purposes, you may need a commercial auto policy rather than a personal auto insurance policy.

 

Not Sure What Policy You Need? We Can Help 

A-kan insurance brokers will help you review your business coverage needs and find you right insurance that fits. As your business grows and evolves, your insurance needs may change. We will regularly review your policies and coverage limits to ensure they align with your current business activities and risks. 

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