Home-Based Business Risks You Never Saw Coming

April 2019
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You’re in your kitchen, pouring yourself a hot cup of coffee. You mix in a little milk and head over to your kitchen table where you sit down to… start your workday.

Running a business from home definitely has its perks. No commute. No distractions. Access to all the comforts of home.

But there are hidden risks to running a home-based business that you might not be aware of.

Learn about these hidden home-based business risks and what you can do to protect yourself from incurring financial losses if the unexpected occurs.

Third-Party Injury on Your Property

Imagine you have a client over to check out the sketches you’ve drawn up for their kitchen renovation and home addition. All goes well and you have their approval to draw up the final plans for them to submit to the county. You’re on cloud nine until your client wanders off to find your restroom and you hear a cry from the hallway.

You find him sitting on the ground clutching his ankle. He tripped over that loose piece of carpeting you’ve been meaning to tack down and twisted his ankle. Hard.

Not only could he hold you liable for medical fees and work time lost because of his injury, but he could also sue you for pain and suffering.

Protect Your Home-Based Business with General Liability Insurance

A vital form of coverage, general liability insurance can pay for damages from accidents involving a third-party, including:

  • court costs
  • settlement fees
  • medical bills
  • work time lost

Your Product Causes Injury or You Give Bad Advice

You sell artisan baked goods created in your home to local coffee shops. One day, a batch of your delicious goodies makes a lot of people sick. You’re going to be held accountable.

Or maybe you are a tax consultant working from your home office who advised a client that they could reduce the amount of federal withholding on their paychecks and when tax season rolled around they found out that they owed. A lot.

Causing injury with a product you made or offering bad advice can land you in hot water. Even if something isn’t really your fault, a client or customer seeking litigation could end up costing you a lot.

Protect Your Home-Based Business with Professional Liability Insurance

Also known as errors and omissions insurance, professional liability covers you for financial damages stemming from incidents where you may be at fault, including:

  • court costs
  • settlement fees

Employee Injury in Your Home

Business is booming and you can’t handle the workload on your own – you’re happy to say that it’s time to expand the business a little. You bring on an assistant to help with administrative tasks and project management.

Not only could you be at risk of financial losses if your employee is injured while working in your home – i.e. their place of employment – but you could also be at risk for being non-compliant with state law if you aren’t protecting your employee with the proper workers’ compensation insurance.

Protect Your Home- Based Business with Workers’ Compensation Insurance

Covering you and your employees from financial loss because of an employee injury, a workers’ compensation policy will keep you compliant with state law and help pay for costs associated with on the job injury, including:

  • Medical bills
  • Wages missed during recovery
  • Rehabilitation and ongoing care
  • Employee lawsuits
  • Funeral expenses and death benefits

Auto Accident While Driving for Business Purposes

You are driving from the print shop to meet a client with the brochures you designed for their gym when you accidentally spill your drink down your shirt and, distracted, run through a stop sign. You clip the end of the car that was taking their rightful turn. Luckily, no one was hurt.

You’re not too worried about losing money because you carry the highest limits possible on your personal auto insurance policy. Unfortunately, you likely won’t be covered by your personal auto policy in this circumstance.

Protect Your Home-Based Business with Commercial Auto Insurance

Your personal auto policy typically excludes claims from accidents that occur if you’re using that vehicle for work/ business purposes. You’ll need a commercial auto policy to help cover costs if you’re involved in an accident while driving for your home-based business, with coverages including:

  • Liability coverage for property damage or bodily injury that you caused to someone else
  • Collision coverage for damage to your car, no matter who’s at fault
  • Comprehensive coverage for damage not caused by a crash
  • Uninsured motor coverage for hit-and-runs or run-ins with an uninsured/ underinsured driver

You’ve worked hard to make your home-based business what it is today. Don’t let the risks you never saw coming ruin all that hard work.

Be sure your home-based business is protected with all the coverage that will protect it, no matter what unexpected accidents come your way.

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