Why You Need Insurance if You Operate a Home-Based Business

If you’re self-employed, there are huge benefits to operating your small business from home. In fact, BC has the highest rate of self-employment in the country, with thousands of entrepreneurs offering a wide range of services, directly from their homes. But, there are many misconceptions about safely operating a business when it comes to insurance. In this article, learn more about the value of insurance for home-based businesses in protecting you and your work from interruption.

Home Insurance Doesn’t Cover Key Business Requirements

The majority of small businesses in BC are classified as micro businesses (employing fewer than five employees), or self-employed individuals without employees. Many of whom work from home and carry regular home insurance. 

You may assume that your at-home business doesn’t require more than regular home insurance, especially if you’re self-employed. Unfortunately, this isn’t the case. While your regular home insurance may cover some business-related items, it won’t cover commercial activities. This means that it might cover personal items that you also use for business, like your laptop, but it won’t cover special, professional, and trade-specific equipment, stock, or merchandise.

Know the Difference – Home Insurance vs. Home Business 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.

Please note: Take caution as some insurance plans will void your agreement if you try to claim costs unrelated to your home.

Small Business Insurance for Home-Based Businesses

Small business insurance for home-based businesses can cover supplies and potential issues relating specifically to your operations. This insurance may be a specific policy for your business or an add-on to your home insurance policy. It often covers inventory, liability, tools, equipment, and even cyber-security threats.

What May Not Be Covered

  • General liability – If your product or service causes harm to a customer, 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, and flooding are all things we hope to never face in a small business or a home, but property insurance can help. It can cover the cost of repairing or replacing your workspace, including electronics, 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. This can also include transit floater insurance to cover any items while in transit.
  • Cyber – A data breach is something any business owner operating online can fall victim to. Cyber coverage helps protect your business if customer information is compromised, then notifies those customers and provides credit monitoring.

Review Your Current Home Insurance Policy  

If you have home insurance, review your current policy to ensure you have the right coverage and find gaps in your policy that should be covered by home-based business insurance.

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 is that you can customize your plan online from home.

We know you’re busy running your business, so our online tool will help you identify your coverage needs and provide you with a customized quote. Then, you can purchase a policy 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 Insurance.

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 business articles.