Insurance for Small and Home-Based Businesses

Starting a business is very risky. In addition to the possibility of failure, there are a lot of things that can go wrong and small business owners need to protect themselves and reduce these risks. Examples include:

• Loss of property (building, office furnishings, computers, inventory, etc.) due to fire or theft
• Lawsuits arising from defective products, an error in service
• Damage to your business vehicle resulting from theft, accidents, flooding and other events
• Employees injured in the workplace
• Customers injured in the business premises

The State of Wisconsin’s Office of the Commissioner of Insurance has put together a comprehensive guide on the types of insurance that small businesses and even home-based businesses need. While the guide focuses on Wisconsin laws, it’s still a great read if you want to know some of the insurance products your business might need.

Another great resource is the Insurance Information Institute’s Insuring Your Business: Small Business Owners’ Guide to Insurance . It is another comprehensive guide that walks you through each of the insurance products your business may need – risk management, property insurance, business vehicles, workers compensation and life insurance for key employees. The best part of the Guide (other than it’s free to access on the Web) is that it discusses the insurance needs of specific types of business, from artisans to retail stores to manufacturers to ecommerce.

With regards to home-based businesses, the III Guide states that one of the common mistakes of home business owners is thinking that their homeowner’s policies could actually cover the insurance needs of their business. But a typical homeowner’s policy may not provide enough coverage as “the usual limit is $2,500 for your business equipment while at home and $250 when it’s off the premises.” That is certainly not enough if you’ve got a lot of equipment and inventory inside your home.

After reading these two guides, consult and insurance representative to find specific products that your business may need.