There are a number of crazy things that can happen to you and your business. We could play the “what if” game for hours but the bottom line is that you need to be properly insured to make certain that no one sues your pants off and to protect yourself from a catastrophic event. This is as important for home-based businesses as it is for owners of businesses that have an office or retail space.
There are a number of insurance options to safeguard your business from liability associated with the injury of a client on-site. This is the same risk whether you have a business in-home or out of your home. Stacy Willoughby, Financial Advisor for Waddell & Reed states that “If your business is home-based, you may also be at more risk than you realize. For example if a prospective client slips and falls on your porch, your homeowners insurance may not cover the incident because it was business related. This could put your personal assets at risk.” You also have various risks from natural disaster that could impact the recovery of your assets and inventory should “the big one” strike.
Stacy recommends that you discuss the following insurance options and your business needs with your insurance agent:
- professional liability or product liability insurance
- corporate insurance if your business is incorporated
- automobile insurance if you use your auto for business purposes
Disability insurance safeguards you from the catastrophe of personal injury that would prevent you from running your business. Stacy brings up the following important (and scary) questions:
- What happens if you are a photographer and you break a leg and are now physically unable to perform your job?
- What if you are expecting a baby and there are complications?
- What would happen if your paychecks suddenly stopped because you were too sick or injured to work?
- What if you couldn’t work for months, or years?
Stacy emphasizes this type of insurance as extremely important: “Disability Insurance protects your most valuable asset, your ability to earn an income. All of your monthly bills, including food, utilities, house and car payments still need to be paid. When you also consider things like tuition and retirement funding, it’s easy to see how savings could quickly disappear.”
Talk with your insurance agent about your business and personal insurance needs. Chances are you are under-insured and putting your business and well-being at risk. Tomorrow, we’ll discuss how to put this in the hands of a professional.