Insurance. It’s definitely not the most exciting part of starting a business but you really do need it. There are a range of different types of insurance that you might need, even as a one-person home-based business and I’m going to cover the basics here:
Liability Insurance
If you injure someone or damage their property and you are found to be at fault, you may need to pay damages. Liability insurance protects your business against these costs. Liability insurance isn’t just for big companies who have to cover themselves against employees falling off ladders. If you’re a cleaner you could stain a client’s carpet, for example. Even an IT consultant could find a client tripping over their laptop case!
General liability insurance can cover a range of different things like employees, customers and damage to property and tools.
Professional Indemnity Insurance
Professional indemnity insurance covers you if you need to pay to correct a mistake or cover any legal costs because of negligence e.g. giving incorrect advice or making a mistake in your work. You’ll need this if you offer advice or handle clients’ data or intellectual property.
Home insurance
The home insurance you already have may cover your business at no extra cost, especially if your business is basically just a laptop. But it’s important that you give your insurance company a call to tell them that you’re running a business from home. Otherwise they may refuse to pay if you make a claim.
Check the terms and conditions of your mortgage too, as your mortgage provider may also need to know about your home-based business.
Motor insurance
If you’re using your car for your business, don’t forget to tell your motor insurance company. As for house insurance, not informing the insurer may make the policy invalid if you need to make a claim.
Adding business cover to your policy doesn’t usually cost much and it may even be free.
Other types of insurance
Depending on your business, you may need more specialist insurance too. For example, if you have expensive stock in transit, you’ll probably want to insure that. And business interruption insurance can cover you if your business has to stop trading due to e.g. broken equipment or fire damage. Or perhaps even unoccupied insurance.
For more information on the type of insurance that your business needs, it’s best to talk to an insurance broker.