Home-Based Business Insurance

Ontario Home Based Business Insurance

More and more people are operating businesses from their home. Having your business in your home can be perfect for many reasons, but it can also change everything. Business owners who operate from their homes require a home based business insurance policy to be properly protected. This policy is often not very expensive, but it is a wise investment and will protect your business and your home while giving you peace of mind. Our home based business insurance professionals at Morison insurance will provide insurance tailored to meet your needs.

Your home policy does not cover damages or accidents that occur as a result of performing business operations out of your home. For this reason, it is important to add a home based business insurance endorsement to your homeowner insurance policy. It’s best to speak with an insurance expert to ensure that you have the right Ontario home based business insurance policy.

What is Home Based Business Insurance?

Home based business insurance protects your home business from damages, losses and liabilities that may occur in your home as a result of the business that you conduct. Some of the things commonly covered include your office equipment, client liabilities, and business interruption if your home is ruined and renders you incapable of running your business as you otherwise would.

A home based business insurance policy can usually be added to your property insurance as an endorsement to protect your business. It’s important to note that different insurance companies may not all offer protection for the same type of business. Rather, they will have a list of specific businesses that they will cover. If your business does not fit into one of those categories, then you will need a commercial business insurance policy—even if the business is registered to your home. Many homeowners don’t realize that they need some sort of home based business insurance protection if their business is registered to their home, regardless of what type of business they operate. Your business will either need a home based business insurance endorsement or commercial insurance coverage.

For example, if you make jewelry out of your home that you sell on Etsy, it’s most likely that a small home based business insurance policy will provide adequate coverage. However, if you work as a plumber, you’ll more than likely need a commercial policy. The reason for this is that plumbers tend to make more income than craft-based businesses, so they need greater coverage that’s not necessarily offered under a home-based business insurance policy.

Who Needs Home Based Business Insurance?

All business owners operating their business out of their home should strongly consider home based business insurance. Ontario home business owners can encounter potentially costly problems that require adequate financial support to overcome—equipment can be stolen, clients can sue and damages to your home can prevent you from conducting your business. Don’t let risks like these hinder your growth. Get the home based business insurance you need to be protected while pursuing your dream.

Why Get Home Based Business Insurance In Ontario?

If your business is registered to your home, you must disclose this to your insurance carrier and broker. Otherwise, you won’t have any protection if a third party decides to sue you. The person filing the suit can go after your home—not just your business. Also, if you don’t notify your broker, it’s possible that they could cancel your policy.

While applying for home based business insurance, Ontario brokers at Morison Insurance will ask questions to figure out if you need commercial or personal insurance coverage. Adding home based business insurance coverage to your personal coverage is actually very inexpensive; a basic package can cost as little as $100 and go up to $600. Commercial coverage for home based business insurance generally offers more robust coverage from a commercial perspective, and typically starts around $750 and goes up from there.

Important Home Based Business Insurance Coverages To Consider

When inquiring about your unique home based business insurance policy, you should ask your broker about what the policy covers and if you need any add-ons to provide full protection. Different insurance policies offer different levels of coverage. Your Morison Insurance broker will work with you to ensure you purchase home based business insurance from a company that offers the best coverage possible. Here are a few types of coverage that could be included in your home based business insurance policy.

Accounts Receivable Protection

Some insurance companies offer accounts receivable insurance as part of your home based business insurance coverage. It protects your business against any losses caused by the inability to collect payment from a customer for a range of reasons. For instance, if a customer does not pay you because they go bankrupt or insolvent, or they do not pay you on time, this policy will pay you up to the insured credit limit. This protects you from loss of income, maintains cash flow and secures your earnings. There are four types of accounts receivable insurance, including:

• Whole Turnover: This type of coverage protects your business against non-payment of commercial debt from all customers.
• Key Accounts: With this type of coverage, you can choose to insure your largest customers whose non-payment would cripple your business.
• Single Buyer: If you primarily work with one customer, then this type of coverage may be the best option.
• Transactional: This form of coverage protects you against non-payment on a transaction-by-transaction basis. It’s best for companies with fewer sales.

Valuable Papers Protection

If you have important documents as part of your business, then you need valuable paper protection as part of your home based business insurance. Ontario residents who work as accountants, for example, and house important financial information for their clients and were to lose those documents during a fire, could find themselves in serious legal and/or financial trouble. With valuable paper protection, you are covered for the cost of reconstructing or transcribing documents and records that were damaged or lost following a covered loss. If the documents were irreplaceable—say you work in antiques and lost an important certification of authenticity—then the insurance company may cover the value of the lost or destroyed property. However, it’s important to note that this will vary per insurance provider.

Extra Expenses Protection

This covers a reduction in income due to a loss. Extra expenses protection is a type of home based business insurance coverage that pays for a company’s non-ordinary expenses after a disruptive incident. For instance, if you are a photographer and your studio is located in your basement but it was damaged due to a flood, then this policy could provide cash to help you stay in business while your property is repaired or replaced. This type of home based business insurance coverage applies to the period of time between when a business is forced to close temporarily and when it has been restored to normal daily operations. It’s important to note that the expenses that are covered under an extra expense insurance policy need to be considered both reasonable and necessary. This could include the cost of setting up a temporary studio (in keeping with the photographer example) so that you can maintain usual business activities, should your studio not be accessible while it’s being repaired.

Personal Liability

Business owners often confuse personal injury liability insurance with general liability insurance, however the two are not the same. General liability covers third-party property damage and bodily injury. Meanwhile, personal injury liability protects you and your family from lawsuits relating to libel or slander. This can include comments made on public websites and social media accounts. This type of home based business insurance coverage can be very useful if you provide a service or goods for people where they may be inclined to leave reviews. Should a client defame you publicly, you have grounds to sue them to protect your good name and prevent loss of business.

Business Property Protection

Most standard homeowner policies have special limits applied to any contents pertaining to a home business. Special home based business insurance coverage can be purchased to ensure the investment you have made into the property pertaining to your business including such items as computers, filing cabinets and printers will be protected by selecting a limit to suit your unique business needs.

Business Interruption Protection

In the event that you suffer a loss to your home where your business is operating, and you are unable to continue with normal operations, business interruption insurance will cover the loss of business income or profit lost during the period of restoration to repair or restore your home.

Commercial General Liability Protection

Liability is one of the greatest risks to a home business. The personal liability coverage under your personal property policy will not cover liability arising out of business operations in your home. A client could fall while walking up the steps to your home or you could be sued because of problems with a product or service you provide. The liability coverage under your home based business insurance endorsement will provide you with the added liability protection you need.

Cyber Liability Insurance

Cyber crime can be extremely costly to your business. Protect yourself with cyber liability insurance. This type of coverage protects you in the event that confidential client and/or financial information is hacked, stolen or compromised due to another kind of cyber attack such as phishing. Cyber liability on your home based business insurance provides coverage for notification costs, legal expenses and risk management fees.

Product Liability Insurance

This type of home based business insurance provides coverage for property damage or bodily injury due to a product you sell, manufacture or distribute. For instance, if you manufacture soap out of your home and a client sues you claiming the soap gave them a rash, product liability insurance will usually cover the cost of legal fees, settlements and defense costs. Product liability insurance usually covers damages caused by design, manufacturing and marketing defects.

Equipment Breakdown Insurance

If you use any type of equipment for your business, then you should consider purchasing equipment breakdown coverage for your home based business insurance. This type of coverage covers the cost of repairing or replacing equipment that is damaged due to an electrical or mechanical breakdown. This includes everything from sewing machines to computers.

Is Insurance Available For Home Based Businesses?

Absolutely! Many insurance carriers are able to add a home based business insurance policy onto your homeowners insurance policy. In fact, it’s essential that you let your insurance provider know the moment you decide to open up a sole proprietorship that operates out of your home. But that’s not the only option available to you. It’s also possible to get a commercial business policy for your home based business insurance, which may be the better option for you depending on your sales volumes, revenues and the type of business you run. At Morison Insurance, we can help you obtain a number of competitive quotes from Ontario’s best insurance providers, so that you know you have the best coverage possible for your home based business insurance.

What Is Not Covered Under This Policy?

Typically, a home based business insurance policy in Ontario will not include errors and omissions insurance. Also known as professional liability or malpractice insurance, this type of coverage is very important for professionals to have. However, it’s usually purchased through an association or as an additional coverage, depending on your insurance provider. It can also be included on a commercial home based business insurance policy

Professional liability insurance protects individuals from being sued on the grounds their clients lost money due to bad advice, breaking a contract, alleged negligence, misconduct and failure to deliver services as promised.

How Much Does Home Based Business Insurance Cost?

Many entrepreneurs are surprised at just how affordable home based business insurance coverage is. Usually, you can purchase an addition to your home insurance policy for between $100 and $600. However, you should note that this coverage limit only extends to businesses that earn a certain amount. If you earn more than that amount, you will need commercial business insurance coverage instead, which generally starts at around $750 and goes up from there, based on factors such as the type of business, the necessary coverage limits and your unique risk exposures.

What Is the Difference Between General Liability Insurance and Home Based Business Insurance?

Home based business insurance usually covers more than just general liability, although general liability coverage can be included in this policy. The idea is that to run your home based business safely, you will likely need more than just general liability coverage. While it protects you from being sued on the grounds that a third-party was injured on your property, or your business operations damaged their property, most entrepreneurs need further coverage—such as business property protection and personal liability.

Does My Homeowner’s Policy Cover Disasters That Occur Due To Business Equipment Failure?

Typically, most homeowner’s policies do not cover any damages to your home that result from business-related activity. For instance, if you use metal smithing tools to make jewelry out of your basement and these tools cause a fire and part of your home is destroyed, then you will most likely not be covered by your homeowner’s policy. Rather, you should check to see if your home based business insurance policy will provide protection from this risk.

Do I Need Errors And Omissions Insurance?

If you offer professional services, then yes, you need errors and omissions insurance. If your business relies on giving clients advice, such as accountants, therapists and consultants, then professional liability insurance is absolutely necessary. Without it, you may wind up in serious legal trouble should a client allege they lost money due to bad advice, failure to deliver services as promised, alleged negligence and more. Don’t take that risk. Make sure you have proper coverage by speaking with one of our qualified Morison Insurance brokers.

Do I Need Home Based Business Insurance Coverage To Work From Home?

No, you do not need home based business insurance coverage to work from home—unless you are an entrepreneur whose business is registered to your home. If your company has transitioned to working from home, then you do not need additional coverage to protect yourself. If you have concerns about laptop or other expensive equipment theft, then you should talk to your insurance broker. It’s likely that these high-value items can be protected under your standard homeowner’s insurance policy.

Where Can I Get Home Based Business Insurance?

At Morison Insurance, we work hard to find our clients the best insurance coverage available at competitive quotes. As a family owned and operated business, we extend that sense of being part of our family to all our customers. We want to build a long-term relationship with you, so you can have peace of mind knowing that our team always has your best interests at heart. With highly proficient and friendly brokers, it’s no surprise that we are one of Ontario’s most trusted insurance brokerages.

Speak with a home based business insurance expert at Morison Insurance, where we can get you multiple quotes from Ontario’s leading insurance companies. Let’s ensure your home business is properly protected. Get started today by calling 1-800-463-8074 or by filling out the form on our website.