Home Base Business

In today’s economy, many people are thinking about starting a home base business (such as Wedding Planner or Commercial Printer) to supplement their income while they’re still working or to help their current situation due to their position being eliminated. It’s a great idea to start your business at home since it’s cost effective, convenient and flexible.
Home base business is cost effective because you’re saving on rent, utilities, phone line and not having to worry about breaking a lease if the business didn’t get off the ground. It’s convenient because you’re not traveling to another location for your business instead your clients come to you. You save on the wear & tear of your vehicle, gas and time. It’s flexible because you’re not tied into the hours of opening and closing at certain times. You can see your clients whenever it’s convenient for you and your client.
While home base business is a great idea but did you know that you may not be covered under your homeowners or renters insurance because your homeowners or renters insurance may not be adequate such as lower limits of $100,000, $300,000 or $500,000 versus $1,000,000 for business insurance.
That is why you need business insurance to protect your personal assets and have a peace of mind in the event of such covered loss such as fire, theft or a lawsuit. Business insurance provides coverage for your business personal property for fire or theft such as your desk, computer, or data stored in your computer, or file cabinet
Fire, explosion or lightning damage
Your property insurance for small businesses covers damage you may cause to other people’s property as a result of fire, lightning or explosion, whether you own your business property or rent it. This coverage even applies to other areas in your building that may be damaged as a result of negligence on your part. Let’s say a fire in your office on the building’s second floor causes damage to another company’s offices below. Your liability policy will pay for the damage to the downstairs office space.
What general liability insurance coverage protection can provide
Bodily injury
It may be difficult to imagine how your business could cause serious harm or even death for another person. But it’s good to know that if you are ever held responsible for someone else’s sickness, injury or disease, your general liability insurance policy would pay for:
•Medical care costs
•Loss of services
Court-awarded compensation for deaths that result from the injury
Property damage
Even if you’re careful and take precautions, it’s still possible that something your business does – or something it doesn’t do – could damage another person’s property. It’s also possible that your actions might prevent the property’s owner from being able to use it. In such cases, your business liability insurance coverage compensates for:
•Physical damage to the property, or
•Loss of use of the property
It is important to note that property damage liability coverage often does not cover damage caused to client property you are working on or have in your possession.
Products-completed operations
Commercial general liability insurance policies generally include liability protection for services or products completed by your company. So, if something your company manufactures or a service your company provides causes an injury, your policy would pay for any resulting legal expenses, as well as damages up to your policy’s limit.
Medical payments
If a person should be injured, either directly by you or at your place of business, your commercial liability insurance coverage would pay for funeral and medical expenses incurred within a year of the accident. For example, if one of your clients slips and falls at your office and requires medical treatment, your policy would cover the cost of that treatment. Of course, policy limits apply.
Personal injury
Personal injury is the part of the commercial general liability policy that protects you should someone claim that your business caused them damage that isn’t physical. In the following examples, most liability policies would protect you against any lawsuits related to:
•Publishing, in writing or verbally, false information that libels or slanders an organization or person
•Publishing material that violates someone’s privacy rights
•Falsely detaining, arresting or imprisoning someone
•Maliciously prosecuting someone
•Evicting someone wrongfully
Advertising injury
Should you ever be sued over something that happens while advertising your company’s products or services, your business liability insurance protection will cover the claim. Advertising injuries can arise from:
•Publishing, verbally or in writing, false information that libels or slanders a person or organization
•Publishing material that violates an individual’s privacy rights
•Copying another company’s style of doing business, or advertising concepts
•Infringing on another business’s title, copyright or slogan
In addition to Business Insurance, Errors and omissions (E&O) is the insurance that covers your company, or you individually, in the event that a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results. For realtors, mortgage brokers and insurance agents, it is often called errors & omissions. For doctors, dentists, chiropractors, etc., it is often called malpractice insurance. For lawyers, accountants, architects or engineers, it may be called professional liability. Whatever you call it, it covers you for errors (or omissions) that you have made or that the client perceives you have made.
Most E&O policies cover judgments, settlements and defense costs. Even if the allegations are found to be groundless, thousands of dollars may be needed to defend the lawsuit. They can bankrupt a smaller company or individual and have a lasting effect on the bottom line of larger companies.
In short, E&O coverage provides protection for you in the event that an error or omission on your part has caused a financial loss for your client.
Who needs E&O insurance?
The best-known professionals who need E&O insurance are realtors, mortgage brokers, insurance agents, doctors, lawyers, accountants, architects, engineers, etc. However, less thought about individuals range from advertising agencies to commercial printers, Web hosting companies to wedding planners. If you are in the business of providing a service to your client for a fee, you have an E&O exposure. You may want to consider what will happen if the service is not done correctly or on time, and it costs your client money or harms their reputation.
Why does my company need coverage?
To put it very simply, everyone makes mistakes. Even with the best employees and the best risk management practices in place, mistakes will be made. No one is perfect.
For example, if a wedding planner reserves the reception hall, the band, the caterers, etc., for May 22 instead of May 29 and everyone shows up except the wedding party and guests, who pays? And imagine the emotional distress caused to the bride if this were to happen!
By not purchasing E&O your company can be taking a serious financial risk. These types of losses are not covered under a general liability policy. And, as stated earlier, even if you are not at fault, litigation is both time consuming and expensive.
When should you buy E&O insurance?
As with any insurance, the best time to buy an E&O policy is before the risk is taken. If you are in the service industry and you know you will have the exposure, make E&O insurance a part of your insurance portfolio. Many contracts with clients will require insurance to be in place. In some cases, it is a selling point with your clients. It gives them the peace of mind of knowing they will be compensated if there is an error or omission