Now more than ever, many successful entrepreneurs and small business owners have opted to operate their companies from the comfort of their own homes. However, just because you can attend virtual meetings in your pyjamas bottoms and run the company in fluffy slippers doesn't mean that it isn't a real, lucrative company. On the contrary, home-based business owners conduct themselves with as much professionalism as corporate giants, and as such, they need to be insured like brick and mortar companies.
We often find that home-based business owners often mistakenly assume that since they have Household Insurance, their business is automatically covered by default. These business owners must be aware that neither Household nor Renters' insurance policies cover businesses operated from home. The type of coverage you will need depends on your business or what industry your company falls under. To help you along the way, we have provided a list of some of the types of home-based business insurance cover available:
Business Property Insurance – This policy covers any kind of equipment used to operate your home-based business, such as computers, printers, generators, furniture, etc., in the event of loss or damage. Business Property Insurance is essential for home-based businesses as Household Insurance usually does not cover loss of business equipment due to fire or flood.
Liability Insurance – This type of cove is essential if clients or customers come to your house for business purposes. Liability insurance helps protect you and your business from being liable for damages incurred by other people or their property that is otherwise not covered by Household Insurance. For example, if a product supplier slips on your premises while delivering, this policy will protect you if they decide to sue for damages. Now what happens if your company does not involve clients or customers visiting your home business – are you absolved from liability? Possibly. But consider what would happen if you are a home-based catering company and your food is responsible for making clients ill.
Professional Liability – Like individuals operating from offices, those working from home may need liability insurance. This cover is particularly catered for consultants or those in a similar position who could be at risk of negligence or a failure to deliver claims made by clients or patients, for that matter.
Product Liability – This policy is for those businesses that specialize in making and supplying products. Product liability helps protect you and your business from damages to an individual or property that results from the product your company produces, manufactures or supplies. For example, an electronic device developed by your company had been incorrectly wired, resulting in a fire or electrocution.
Business Automobile Coverage – Most businesses will make deliveries or visit clients. Home-based business owners need to be aware that their personal car insurance doesn't include coverage for business vehicles. Instead, you will require a separate policy for a business vehicle, which will provide coverage for theft or damage.
While the above are usually the most sought after business insurance options, there are several other coverages that, depending on your company, can be equally as important, such as commercial crime insurance, workers compensation insurance, etc. Given the plethora of potential business risks and liabilities, it is important to consult a financial advisor to help you identify the right combination of policies to put in place depending on your unique business needs. Let PBA help give you one less thing to keep you up at night – even if it is in your home office.
Contact us:
Phone: 011 803 9686
Email: vivian@pbafsa.co.za or bev@pbafsa.co.za
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