Home-Based Business Insurance
If you operate a home-based business, your current residential policy may not cover liabilities incurred during your daily operations. For example, if a client injures themselves on your property while visiting your home, your policy may not protect you from a lawsuit. Without protection, it may easily end up costing you thousands of dollars in liability and defence costs. Similarly, your computers, books and business equipment may not be covered from theft or damage.
Frequently asked questions and tips
What issues should a home based policy cover?
- Coverage for business property on and off premises.
- Business Liability Coverage at home or during off premises business.
- Business Interruption in the case of loss of income due to fire or other insurable loss.
What are some popular home-based businesses that require coverage?
- Consultants
- Music Teachers
- Tutors
- Telemarketers
- Cosmetic Sales
- Desktop Publishing
- Data Processing
- Photographers
What is liability insurance?
Umbrella liability is excess liability coverage that protects you in the event that your personal insurance policies (home, auto, watercraft, etc.) do not provide enough liability protection after an incident. For example, imagine that you have $1 million liability insurance on your homeowner's policy. While having a backyard pool party one of your guests suffers an acute injury after a slip and fall resulting in a $3 million law suit. Your home insurance company will respond to defend and pay the first million. The homeowner would be responsible for the balance of $2,000,000 including defense and court costs. However, if you had a $5 million umbrella policy, it would pay the balance of the claim including the additional defense costs up to $5 million.
Umbrella liability also provides protection for events that are typically excluded from your personal home insurance such as accusations of libel, slander, defamation of character or wrongful eviction by any of your dependant family members. In these cases, an umbrella policy covers all defense and court costs and any judgments up to your policy limit. Who needs umbrella liability? You don't need to be a millionaire to be sued like one. However, as your assets increase, you become more of a target for a large lawsuit. In addition, the more vehicles, drivers, watercraft and properties you have, the greater your chance of having an accident.
How great is your need for this coverage?
Go through the questions below. The more times you answer yes, the greater your need is for this coverage.
- Do I frequently travel to the USA?
- Do I own a swimming pool?
- Do I own a cottage?
- Do I own watercraft, ATVs, or snowmobiles?
- Do I have teenagers driving vehicles registered in my name?
- Do I serve on the board of a non-profit organization (e.g. hospital, sports teams, school)?
- Do I have more than $1 million in personal assets?
- Do I or my teenage children entertain guests or have home parties where alcohol is served?
How much does it cost?
Depending on your exposure and how much coverage you want, the premium would range from $100 to $500 annually.
