Many people start home-based businesses to earn extra income, and these businesses can come in all types, ranging from beauty salons to bookkeepers and everything in between.
During the start-up phase, there are many factors to consider: Will you provide a product or service? If you’re providing a product, will you make it at home? How will you market yourself? Where will you look for funding, and what financing programs are available?
Carving out your own niche is the fun part of starting a business, but several other areas need decisions as well: Will you operate as a sole proprietor or form a corporation? What accounting rules will you need to know? What relevant government agencies should you be aware of? And what kind of insurance will you need to protect your new venture?
Whatever your business, if you operate out of your home, you will need liability insurance for the products you make as well as for the customers you do business with.
Be aware that your homeowners’ insurance policy does not provide this coverage. Insurance companies want you to insure a business on a business policy.
In addition to liability concerns, you may have bought materials and equipment that are specific to your business rather than part of your household belongings. These also need to be covered by a business insurance policy.
If you use your own car to make deliveries or go to appointments, your personal auto policy will not cover this and you will need business auto coverage.
Fortunately, there is an inexpensive type of policy that can give you an adequate liability limit and coverage for your business property and auto. It’s called a business owners policy, and it’s offered by nearly every major insurance carrier.
Costs can run between $500 and $1,000 per year, depending on what you need to insure.