Over the past several years the number of new online businesses has skyrocketed and with that the number of home-based online businesses. If this sounds like you, you may be wondering, “Do I need insurance for my home-based online business?” At first, the answer to that question may not seem so obvious but this article should help you make the right decision.
The No Insurance Method
Whether it’s making products yourself and selling them online, buying wholesale and reselling, or providing some kind of freelance consultation service, having your business and your personal assets protected against financial loss is important. While in some cases you may feel that you’re able to go without Business Insurance because your business is not a brick-and-mortar shop, certain characteristics of your business may mean that you are at risk without proper Business Insurance. Business owners should also have strong legal language on their website such as disclaimers, terms and conditions, user agreements, etc. If you’re one of these businesses currently without Business Insurance, be sure to at least have these bases covered. To help you get started, look at what other reputable companies in a similar line of business have displayed. Getting legal help on creating the right wording may be well worth the cost.
You may be thinking that you can go without Business Insurance because you have Homeowners Insurance or Renters Insurance. After all, your office is actually your spare room or living room and that’s covered, right? Generally, an unendorsed homeowners or renters policy excludes any business use, and depending on the type of business, may not cover you at all. An Insurance Specialist will be able to help you figure out if you’re covered or not.
This is the fundamental coverage for any business including your online business. This type of Business Insurance is so important because it covers damages, or alleged damages, that your employees or products and services may have caused. In addition, General Liability Insurance provides some coverage for any legal fees your business may incur.
Commercial Property Insurance
Depending on what you offer through your online business, this may be a type of insurance to consider, especially if you keep inventory in your workspace or have valuable supplies and documents. In the case of a loss, such as damage to property, Commercial Property Insurance helps your business stay afloat by paying for the repair or replacement of those valuable business items you’ve lost. Furthermore, business income may also be covered, helping to relieve stress should potential business income be affected by a loss.
Professional Liability Insurance
Many online businesses offer consulting or management services. If your business is involved with other businesses, you may be liable should one of your actions or recommendations prove to be faulty or you make a mistake that affects your client. For this reason, Professional Liability Insurance is also known as Errors and Omissions Insurance. This insurance isn’t needed for every business, but if you’re performing some sort of marketing consulting or IT work, for example, this insurance is a protection you don’t want to be without.
Cyber Liability Insurance
Last but not lease is Cyber Insurance. As an online business cyber risk is an increasingly important matter to address. Not only can your business information be at risk but your clients’ may be vulnerable as well, further increasing your scope of liability.
Running an online business from home may be very convenient but it may also mean an increased risk for data breach since most home-based businesses don’t have the security resources a larger business with an IT department has.
Your best bet when looking for proper insurance for your home-based online business is to speak with a Business Specialist. They are experts in helping you put together a coverage package that best fits your online business. Business Insurance Specialists are here to assist you: (866) 570-7335
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms, and coverage in a given policy may be different from those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.