There are immense benefits to operating a small business from your home, especially if you’re self-employed. In fact, British Columbia has the highest rate of self-employment in the country, with thousands of business owners working directly from home providing services ranging from retail and construction to digital and professional business services.
Despite so many entrepreneurs working from home across the province, there are still many misconceptions about how to safely operate your business when it comes to insurance. Small business insurance is essential to protecting yourself, and your business, from interruption.
Home Insurance Doesn’t Cover Several Key Business Requirements
If you operate a home-based business, you’re not alone–approximately 85% of the small businesses operating in British Columbia in 2020 were classified as micro businesses (employing fewer than five employees) and over 73% of those businesses are self-employed individuals without employees, many of whom work from home and carry home insurance.
You may assume that your home-based business won’t require more than regular home insurance, especially if you’re self-employed. Unfortunately, that isn’t true. While your regular home insurance may cover some business-related items, such as personal electronics (like a laptop) that serve for business too, it often won’t cover commercial activities–including special professional and trade-specific equipment, stock, or merchandise.
Know the Difference–Home Business Insurance vs. Home Insurance
Home Insurance
Your home insurance is designed to protect your property and/or belongings–basically everything about your home that isn’t related to your business. Depending on your home insurance policy, it may cover the costs to repair damage caused by floods, fire or other natural disasters, as well as replacing your personal belongings.
When it comes to protecting your business, small business insurance customized for a home-based business can cover supplies and potential issues that relate specifically to operating your business.
Caution: there is also a risk in some home insurance plans of voiding your agreement if you try to claim non-home related costs.
Small Business Insurance for Home-Based Businesses
Home-based business insurance is a specific policy for your business or can be an add-on to your home insurance policy covering property and inventory, liability, tools or equipment, and even cyber security threats.
What May Not Be Covered
General liability–If a product/service you sell causes harm to a customer or damages their property, or someone sustains an injury at your business, liability coverage can help cover legal fees and lost wages.
Property and inventory–Theft, fire or flooding are all things we hope never happen to a small business (and a home), but property insurance can cover the cost of replacing or repairing your workspace, including electronics like computers and printers, or stock and inventory.
Tools and equipment–If your business is in the construction or trades sector, there’s coverage for tools and equipment that you may leave at job sites or that are stored at home between jobs.
Pro Tip! This can also include transit floater insurance to cover any items after they’ve left your property until they reach their destination.
Cyber–A data breach is something any professional who operates online and from home can fall victim to, even if you’ve operated for many years. Cyber coverage helps protect your business if customer information is compromised and notifies those customers and provides credit monitoring.
Review Your Current Home Insurance Policy
If you have home insurance coverage, take the time to review your current policy to ensure you have the right coverage in place and find out what gaps in your policy may relate to your home-based business.
To prevent income loss and service interruption due to any reason, we strongly recommend that business owners with a home office have a commercial insurance policy on top of their home coverage.
Customize Your Coverage from Home
At BCAA, we understand what it means to run a business in BC. The best thing about BCAA Small Business Insurance for home-based businesses? You can customize your plan online from home (or work, or course!)
We know you’re busy running a small business, so our online tool will help you identify your coverage needs, and provide a customized quote and you can purchase a policy in the same day, whenever it’s convenient for you.
If you have any questions along the way, our BCAA Small Business Insurance Advisors are ready to help online or over the phone.
Get a quote today with BC’s Most Trusted Insurance Brand* at bcaa.com/smallbusiness
Small Business BC is Here to Help
SBBC is a non-profit resource centre for BC-based small businesses. Whatever your idea of success is, we’re here to provide holistic support and resources at every step of the journey. Check out our range of business webinars, on-demand E-Learning Education, our Talk to an Expert Advisories, or browse our selection of business articles.