Why Do Home-Based Businesses Need Business Insurance?

Many Americans have lost their jobs due to the economic consequences of the pandemic. As a result, they are exploring other avenues where they can earn a living for their families. Some of them shifted into freelancing business, while others started their home-based business. A recent study showed that one out of five homeowners began a home-based business in the past six months.

As these homeowners hustle for a better living, most tend to overlook that they need to get protection for their business. Like any other business, a home-based business is also vulnerable to risks associated with running a business. Homeowners like you tend to believe that you do not need business insurance since running a business at home like in your garage.
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However, you are unaware that most insurance policies will not cover business-related risks. Business insurance is the only insurance designed to protect a business, even if it is home-based. Hence, you must know some of the reasons why your home-based business should have business insurance:

Possible Lawsuits
You might be running your business in your home’s garage. But it does not mean that lawsuits are no longer possible. Like any business, home-based businesses are at risk of getting lawsuits from clients. You might argue that you already have home insurance. But the truth is, your home insurance cannot cover business-related lawsuits.

For example, a customer visits your store located in the garage. She stepped on a wet portion of the floor and slipped. If she sued you, your home insurance policy could not cover the liability claims. Home insurance is not designed to cover claims from business visitors.

What you need is business insurance, significantly general liability insurance coverage. It is the type of business insurance coverage for claims on bodily injury and property damage caused by your home-based business regular business operation.

Damages To Property
Like any other property, your house is vulnerable to fire and severe storms. Hence, your home-based business is at risk of sustaining damages from a fire or storm. Typically, home insurance will not cover your other home structures that are being used for business operations. If you have a detached garage that you turned into a store and got damaged by fire, your standard home insurance policy will not cover the cost of rebuilding or repairing it.

Although some home insurance policy does provide maximum coverage of $2,500 for business property, in most cases, it is insufficient to cover the loss. For example, you are selling branded clothing in your garage. If a fire struck your garage and your inventory got damaged, your home insurance will only pay up to $2,500. In other words, that amount would be inadequate to replace your damaged stock.

What you need is commercial property insurance. It is a kind of business insurance that protects your business assets. It can pay for the replacement costs of your damaged inventory.

Conclusion
Most home-based business owners might dismiss the need for business insurance. They will argue that they already have home insurance. However, home insurance is not suitable to address business-related risks. Home-based business owners still need to get business insurance to secure their business.

At Priority Insurance LLC, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays, and we're here to help you out. Learn more about our products and services by calling our agency at (864) 297-9744. You can also request a free quote by CLICKING HERE.