If you’re a contractor or a small operation running out of the comfort of your own home, you probably think your existing household insurance covers your business, right? Unfortunately, that’s not always the case — which is why it’s imperative to ensure that you’ve got specific coverage for your employment. Here’s how to know whether or not your home-based business is already covered and what to consider if you need additional policies.
When is a home-based business not covered by household insurance?
When an insurance provider issues a household insurance policy, they’re doing so on the basis that the property is residential and nothing more. Each provider has its own policies regarding whether or not they’ll insure a home with a business operating out of it, and it essentially comes down to the level of risk associated with said business.
These risks include (but aren’t limited to!) things such as whether or not customers visit you at home, the type of business you’re running (are you simply using the space as a home office, or are you crafting products and making goods?), and whether or not your work presents a heightened burglary risk (do you have valuable goods on the premises?).
What about natural disaster coverage?
Your home is automatically covered by EQCover if you have a private policy that includes fire insurance — but if you use more than half of your house’s floor area for your business, that floor area is considered commercial and is no longer insured by EQCover.
You’ll also need separate disaster coverage if you run your home-based business from a standalone structure on your property.
What other types of insurance does my home-based business need?
In addition to ensuring that your workspace is covered for natural disasters, you might also want to consider updating your contents insurance policy with benefits designed specifically to protect your business assets.
Contents insurance typically only protects personal effects, but you can speak with your insurance provider to determine whether or not any of your business effects fall under the umbrella of your current policy. If they don’t, it’s time to think about home office benefits and tools of trade benefits.
As the name suggests, home office benefits generally apply to people who use part of their house as an office space. These benefits cover work-related items such as laptops, desktops, phones, and desks.
Tools of trade benefits are designed for employees looking to protect the tools and equipment they use for work. These assets are relatively low value and usually need to be worth less than $1,000.
Taking action for your business
The best way to make absolutely sure that your home-based business is covered for all eventualities is to have an open and honest discussion with your broker. This way, they can design a personalised insurance policy that meets your specific needs, and you can enjoy peace of mind knowing that you’re covered.
If you’d like to learn more about how Penberthy can get your home-based business covered from top to bottom, give us a call today.