Insureon Blog

El Nino, Third-Party Lawsuits, and Other Liability Concerns for Home-Based Businesses

16. October 2013 10:52

Colorful knitted winter gear

If you own a home-based business, your concerns for liability and property insurance claims are doubled. Because both your private residence and your small business are contained in one location, there’s plenty for you to fret over when it comes to potential lawsuits and property damage claims.

There is some good news, though: according to Reuters, you won’t have to worry about El Niño in 2014 – though that doesn’t mean you’re out of the woods with other potential calamities and lawsuits.

Storms can be devastating. If strong winds knock a tree onto your garage roof, you could be looking not only at costly repairs, also at lost income, if you use that garage for packaging your hand-made crafts or brewing delicious craft beer.

My Business is Small – Are Liability Lawsuits and Property Damage Really Something I Should Worry About?

Absolutely. Being small doesn’t eliminate your risk exposure, and in fact likely means that you have fewer resources on hand to combat any claims that you do face. The good news? For home-based businesses that are considered low-risk, there’s an insurance policy known as a Business Owner’s Policy (or BOP) which allows you to combine Property Insurance, General Liability Insurance, and Business Interruption Insurance into a single policy.

The benefits of being protected by General Liability and Property Insurance are numerous – as your home-based business continues to grow, you may have increased foot traffic to your home. With a BOP in place, you won’t have to pay out of pocket for potential lawsuits if visiting clients are injured.

General Liability Insurance also protects you from other types of third-party claims, which include bodily harm to non-employees, property damage, and advertising injury against competitors. It may seem unlikely now, but any number of hazards could have you wishing you’d gotten the proper coverage.

Property Insurance Only Covers Weather-Related Events, Right?

Property Insurance protects your home-based business from quite a few events, actually. And it’s important to point out that Property Insurance goes beyond protecting you from natural disasters like lightning damage and wind damage. It also offers financial protection for fire, theft, and loss of inventory and supplies.

So if your basement is stocked with colorful scarves you’ve been knitting for the upcoming winter months, but loose electrical wiring sets the collection aflame, Property Insurance could reimburse you for the loss.

I’ve Heard of Something Called “Inland Marine Insurance.” What the Heck Is That?

Don’t worry – we get that a lot. So much so that we’ve dedicated an entire post to it. Check it out here: What Is Inland Marine Insurance?

A quick explanation as it pertains to your home-based business: Inland Marine Insurance protects property in transit. This means that if you operate a home brewery, but sometimes transport your equipment between your home and a business associate’s, your brew kettles and fermentation equipment could be easily replaced, should something happen along the way.

protect your assets

Tags:

Home-Based Business | Inland Marine Insurance | Small Business

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