When Is Your Small Business Big Enough for Insurance?

When Is Your Small Business Big Enough for Insurance?

From side-hustles to full-time work from home, more individuals are working for themselves. Others have gone so far as to start their own businesses. Technology and platforms like Etsy have made this easier than ever for more and more people. While operating a small business from home can be both economical and convenient, it may cause some to consider “When is my small business big enough to insure?”

Business insurance is valuable in protecting assets and in minimizing risks. Let’s take closer look.

Small Business Assets

Small business assets generally include physical assets like inventory, computers, furniture and perhaps even software. These assets can be lost through theft, vandalism or an act of nature. They could be destroyed in a fire or ruined by flooding. If your small business would be difficult to maintain through a loss of any or all of your assets, you should have business insurance. It is important to remember that just because you are conducting your business from your home, homeowners’ insurance will not generally cover business assets. This means separate coverage must be obtained. Too many home-based businesses have found this out the hard way.

Liability Risks

The other aspect of risk involved in operating a business, is that of liability. Liability exposes a business to financial claims from someone who is injured on the business property, by use of a business product or even by actions of an employee. For example, when conducting business from your home, should a customer trip and fall on your property, you could suffer a liability claim. Again, it is important to keep in mind that a traditional homeowners’ insurance policy will not protect a home-based business from these liability claims.

So When Do You Need Insurance?

The first point to consider is that any business conducted from home should have separate business insurance coverage. This is particularly critical if your business is not set up as a corporation or LLC where personal assets are kept separate from business assets. The other time insurance should be considered is when a business’ assets are sufficient to warrant protection.

Many small businesses don’t recognize their risks until it is too late. Discuss your small business with one of our loss prevention professionals. Get the affordable coverage your small business deserves by contacting us to discuss your small business today.


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