Why would I need business insurance?
Since operating a home-based business may involve a significant financial investment, a business owner needs to protect himself and limit the financial risks of events such as lawsuits that may arise from the operation of that business.
What types of insurance do I need if I operate a home-based business?
There are many types of insurance coverage available for a small, home-based business, including contents insurance, general liability insurance, product liability insurance, professional liability insurance, errors and omissions insurance, and disability insurance.
What is "contents insurance"?
Contents insurance pays for loss or damage to possessions on the premises of your home-based business. Your homeowners' insurance will not cover the loss or damage of equipment in your home-based office under your homeowners' policy; this needs to be covered under a separate policy.
What is "general liability insurance"?
General liability insurance covers a home business operator from general claims of liability or injury due to negligence, and protects against claims as the result of bodily injury, property damage, medical expenses, libel, slander, the costs to defend lawsuits, and settlement bonds or judgments required during an appeal procedure. If a client injures himself while visiting your office, general liability insurance will cover the expenses related to this claim. Your homeowners' policy will not cover these types of claims.
What is "product liability insurance"?
Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. If your home-based business sells physical products to people, product liability insurance will cover you for lawsuits that arise from injuries or damages caused by the product that you sell, and its use or misuse.