Starting a business is a remarkable step to take in life. It can be the perfect way to combine doing something that you are truly passionate about, with the freedom and flexibility that comes with being a boss.
Such factors as the rise of modern technology and changes in working patterns mean it has never been easier to start your own business. Indeed, in many cases, this can be achieved from the comfort of one’s own living room.
However, one subject that doesn’t necessarily seem to get brought up very often when it comes to starting a business from home, is what insurance will be required (or desirable) for this.
So, with no further ado, we have delved deeper into this topic below.
Why do I need business insurance?
Business insurance is a crucial element of any small business. It will serve as your protection if something goes wrong in any of a wide range of circumstances, and it will help provide peace of mind for both you and your customers.
It is important to consider the risks associated with running a business from home, which may include:
- Damage to equipment
One of the key risks associated with running a home-based business is damage to equipment – and depending on the nature of your business, this could have disastrous consequences.
So, you should make sure equipment such as laptops, printers, and any other essentials are all covered in your policy. This means you will be able to claim if there is an issue, rather than have to fork out the entire cost of a replacement.
- Injury to staff
Although it is less likely to be the case if you operate your business from home, you may end up having staff of your business also working at your home. If so, as an employer, you will have a duty of care to ensure your staff are safe in the workplace and are not exposed to any unnecessary risks.
If someone is injured or property is damaged as a result of your business activities, you may be liable for compensation and legal costs. Having a suitable liability insurance policy in place will help protect you financially in the (hopefully unlikely) event of this occurring.
- Property damage
Running a business from home increases the risk of damage to the property. After all, as a business owner, will be placing more wear and tear on the property, and there can be an increased risk of damage to elements such as carpets and walls.
The good news is that if repairs do turn out to be required to those elements of the property, the right insurance policy could help you cover those costs.
What types of business insurance are available?
There is a variety of different types of business insurance available for home-based businesses. We have detailed some of those below:
- Public liability insurance
Public liability insurance is designed to cover the cost of any medical treatment or expenses that are associated with injury or damage to third parties, if they occur as a result of your business activities. This type of insurance is essential for home-based businesses as it will protect you from any unexpected legal costs, and will essentially cover your back from the unexpected.
- Small business professional indemnity insurance
Small business professional indemnity insurance should be another high priority. It will cover you if your customers say that you have failed to provide or deliver services as agreed. This may include giving incorrect advice, or if your product does not work as you claimed.
- Business interruption insurance
If your business activities are interrupted due to events such as fire or flood, having business interruption insurance in place will ensure you can continue to operate while the damage is repaired. This type of insurance will cover any lost income and additional costs associated with the disruption, and can help keep the business open in the long term.
What do you need to do to start a business from home?
Getting a solid insurance policy in place is one of the most important steps to take when you are starting a business from home.
Once you have secured the right insurance, here are some other key measures to think about:
- Research the market
The first step is to research the market to understand what your customers’ “pain points” are, and how you can help relieve those pain points. This will help you to create a successful business model that meets the needs of your target customers.
- Create a business plan
Once you have your niche in place, the next step is to create a business plan – this will help to ensure your venture runs smoothly and efficiently. Your business plan should include your goals, budget, marketing strategies, and any other key information about your business – this will be your “business bible” of sorts.
- Set up a legal structure
The next step is to set up a legal structure for your business, such as registering as a sole trader or forming a limited company. This will ensure you are operating within the law and that you are protected in the event of a legal dispute.
- Inform your home insurer
If you plan to run your business from your home, it is important to inform your home insurance provider of this. Most home insurance policies do not cover business activities, so you may need to take out additional coverage.
There are few things more exciting in life than starting out in your business for yourself. However, there are plenty of “dull, but important” aspects of that process to plan for, too. Whatever the planned nature of your business, it is crucial to ensure you have all of the required documents, policies, and administrative measures in place.
Insurance is at the core of a safe and secure business operation, to a much greater extent than some entrepreneurs initially imagine. So, it is well worth taking the time to ensure you have the right policy in place to help protect your business from any unexpected costs or emergencies that could throw you off course.