Many of Canada’s businesses that are now household names had humble beginnings, sometimes started out of a spare room or in the garage. It’s possible that the same could happen to your home business. You never know! But along the way, you’ll want to be sure that your business is protected as well as your personal assets, like your home, your savings, and even your future earnings.
Most homeowners insurance policies don’t cover business-related risks. However, depending on the scope of your business, it may be possible to add a rider to your policy that can help protect both your home and your business. Reach out to your broker and explain the details of your planned business, including the type of activities the business involves and the materials you will use. Your broker can help provide guidance, letting you know whether a rider will provide the coverage you need or if you need a separate business insurance policy.
When we think of insurance, we often think of tangible items to be insured. With home insurance, for example, we usually think of the home and our personal property as the primary focus of the insurance policy. While both the home and personal property are covered by a home insurance policy, often the biggest risk is third-party liability, meeting damages or injuries to others. The same is true for business insurance, whether a home business rider or a dedicated business insurance policy. Some of the biggest losses in terms of dollar value often come from liability claims.
Another important reason to keep your broker in the loop is because starting a home business might materially change the level of risk for the insurer. When you purchased your home insurance policy, the insurer assigned a premium based on the risk as they understood it. If you open a home business, that risk may have changed substantially, possibly affecting your coverage – even for claims that you may not think of as being business-related.
In most cases, business insurance or riders for home businesses are designed to grow as your business grows, so you can expand coverage as needed and your coverage remains affordable while your business is still growing. Getting covered properly is easier than you might think. Just reach out your broker to get started.