Entrepreneurship thrives in Alberta. In fact data from the Centre for Innovation Studies reveals that Albertans have the highest rate in the world for entrepreneurship; much higher than other Canadian provinces, the US and other western European countries.
A significant portion of the entrepreneurs comprises small business owners. These owners either have their own premises, or have taken it on rent, or operate from home.
If you operate your business from home, do you need an insurance cover?
Yes, if you are a home-based business, then you certainly need an insurance cover. That’s because the majority of homeowner’s or renter’s insurance policies do not cover business-related damages or losses.
Further, as each business is different from others, insurance needs of businesses are also different from each other. It may be the case that for your business, you may simply need a specialized policy, while another business owner may simply require a little extra coverage on his or her current home policy.
Either way, a business insurance broker in Calgary can easily guide you on the risks for which you will need coverage and the cost of the cover.
Some factors to consider while obtaining home-based business insurance cover:
Below are some points that you need to discuss with your business insurance broker in Calgary :
Basic features of a home-based business policy:
Every basic business insurance plan offers coverage for office equipment, inventory, business interruption, and liability for clients, third-party consultants, and employees. As this coverage varies from company to company, be sure to let your broker know the nature of your day-to-day operations, to ensure that they can help you find the most suitable cover.
Errors and omissions insurance:
This is an important cover for professionals such as accountants, lawyers, engineers, architects, who provide professional services from their homes and could end up creating a financial loss for their clients due to an error or omission.
Insurance for specialized equipment and tools:
While most standard business operating equipment such as computers and other hardware are covered in a home-based policy, it is the specialized high-end equipment or tools such as camera equipment, carpentry tools or other manufacturing products, that are not covered. They can however be covered, by making an endorsement on your policy.
It is advisable to avoid manufacturing any product at home as this will require additional coverage. Secondly, you could put your home coverage at risk. Manufacturing processes are best done in a factory, and in the event of an incident happening, your claim could be denied, if the process and raw materials violate your policy’s terms & conditions.
Risks to which your home-based insurance is exposed:
Theft and damage to inventory:
The biggest risk is that your inventory is uncovered and exposed to unexpected scenarios that include fires and floods.
Losses due to errors and omissions:
A client could file a lawsuit against you, if he or she suffers a loss because of errors in your work.
Damage to business equipment:
Your essential and specialized equipment is exposed to risks from fires, floods, or mechanical breakdowns. In case an event occurs, most home insurance policies also don’t provide coverage.
Injury to visitors:
Unexpected injuries can occur on your property leading to costly lawsuits. This could include a slip-and-fall injury at your home, and this is typically not covered under a home insurance policy.
What risks does home-based business insurance cover?
Home-based business insurance can be quite comprehensive and provide you coverage against damaged equipment, stolen inventory and customer slip-and-fall accidents on your property. Below are some of the risks against which you are protected:
• Lawsuits filed by customers
• Product or operations liability
• Theft and damage to business inventory
• Theft and damage to stolen business equipment
• Disasters caused by business equipment
• Closure of business for repairs for a temporary period
• Slip and fall causing injury to customer
• Damage to customer property
Talk to a business insurance broker in Calgary
Above factors must be reviewed when it comes to home-based business insurance. Just as you have planned your business for success, plan to secure your investment with insurance coverage that works for you.