Believe it or not, the U.S. Small Business Administration says that more than half of all businesses in the U.S. are located out of the home of the business owner. This is certainly true in south Florida as well.
Unfortunately, many of those home-based business owners aren't aware of the liabilities they are exposed to as a result of their business activity. They have no business insurance. Some assume that their homeowners insurance will protect them. Others are wholly unaware of the risks of their business activity.
Understanding the need for insurance for your home-based businesses is critical. The risks that exist could potentially cripple a small business if there is no insurance to cover the liability.
Types of insurance that all south Florida home-based business owners should consider include:
Workers Compensation Coverage
Do you have employees? The state may require you to carry workers compensation coverage. Workers compensation insurance guarantees that your employees can recover some part of their income if they are unable to work as the result of an injury that occured while on the job. Because you are accountable for maintaining a safe workplace for your employees, workers compensation insurance limits your company's exposure if an employee were injured while working.
General Liability Insurance
If a social guest is injured in your home (for example, because he slipped and fell on your slick stairs), your homeowners insurance would likely cover his damages. Most homeowners insurance policies however exclude coverage for incidents which occur in the home related to the operation of a home-based business. So, a client or customer slipping on those same slick stairs would not be covered by your homeowners policy.
A business liability policy (also called a general liability policy) can be obtained separately from your homeowners policy in order to provide enough liability protection for business-related incidents. In some instances, endorsements can be added to your homeowners insurance policy to allow it to cover these business liabilities.
Commercial Property Insurance
If your home is burglarized and personal items are taken, your homeowners policy will generally cover your losses (within the limits of your coverage). If the business articles belonging to a home-based business are stolen from your home, it is unlikely that the homeowners insurance policy will cover the loss, absent a special endorsement. Instead, a commercial property insurance policy that protects your business property is necessary for your home-based business.
Depending on the profession you work in, you might also need a professional liability policy. These policies protect you against liabilities specifically encountered by individuals working in your profession. That can include errors and omissions insurance for those in the financial industry, malpractice insurance for those in the medical field, or the more generalized professional liability insurance.
As a business owner, you accept certain risks on a daily basis, exposing yourself to liabilities for which you might be unable to recover without insurance protection.
If you're overwhelmed or confused as to exactly what types of insurance your home-based business needs in Florida, give us a call at 561-637-2424. You know your business from top to bottom and we know insurance. Together, we will be able to determine exactly what policies your company needs (and doesn't need) and then obtain the best coverage for the best price.