Home-Based Business
It is a common assumption that your homeowner's insurance policy will cover your home-based business. This may or may not be the case!
In any event, you must make sure your insurance broker is aware that you are operating a business from your home. If you are merely keeping books or doing a bit of accounting, you may be able to have "incidental office use" listed on your homeowner's policy.
An insurance company will be specifically interested in the following questions:
1. Are clients actually coming on your property?
2. Are you making or selling a product?
The type of personal liability you have on your home, would NOT cover you for a loss as a result of your doing business. Also there is usually a limit on business contents under your homeowner's insurance.
As you can see, it is extremely important to discuss your needs with your very knowledgeable insurance broker. He or she will be able to assist you in properly protecting your business.
Retail & Office Insurance
If you have a business or office located downtown, you will more than likely have business insurance. When was the last time you actually reviewed it? Not just looked at it but really thought about the amount of insurance and what are you covered for? Go ahead be brave, get that dusty file and look at your insurance policy. Now imagine the worst possible thing, your building suffers a fire and you are out of business for at least 2 months. Did you purchased "business interruption" coverage? You did, good for you! So now at least you will have some income while the claim is being handled and the building is being repaired. If your business is a retail store make sure you have copies of invoices for all of your stock, this will be required for an insurance adjuster. An accurate list of your of your equipment will also be of great assistance in the event of a loss.
If you are renting space and do a lot of improvements to the office or shop, remember all that money you are spending on your landlord's building needs to be insured by you. These are called "tenant's improvements".
What about "flood and earthquake" coverage? We are in a fairly high risk area for earthquakes (4 on a scale of 6). Without this coverage, a little shake, rattle and roll could leave you without any protection to rebuild.
Is the building heated with a boiler? It is, then do you have "boiler and machinery" coverage? A standard policy normally excludes any coverage from a loss due to a boiler or pressure vessel.
Now you have to consider your liability exposure. Do you carry 1, 2, 3, or 5 million "commercial general liability"? You have to determine what you feel will help you sleep at night. Are you selling an item that someone could injure themselves with or do you sell cotton balls? Also if you are renting a retail space or office space, you must also purchase "tenant legal liability" (covers the space you are responsible for in your lease) which will vary in amounts depending on the size of your space.
By now you are probably getting the idea that business or commercial insurance is whole new ball game compared to homeowner's insurance. Most business insurance needs to be BUILT to fit your needs, each section of coverage fits like a block onto each other. The components of your business will determine what coverage you require. Since you have your long lost file out, now would be a good time to call your insurance broker to really review your coverages.
Package Business Insurance
Some types of businesses or offices can nicely fit into what is called a package policy. Each package contains a number of basic coverages. A number of optional coverages are also available to suit your specific business needs. For a lot of small shops and offices, these policies are best suited to them. They provide just enough protection for their needs. We have found this type of policy ideal for hairdressers, small building contractors, non-profit organizations etc.
Commercial General Liability
Some businesses require only liability insurance since the only real exposure to a loss is damage they could do to other people's property.
If you have a janitorial business, you really do not have much invested in equipment... but put on a super duper wax... someone slips and falls, and you will NEED a liability policy for protection.
Some businesses are such that they actually have to have one policy to insure equipment such as logging equipment (skidders, loaders etc) then a separate policy that insures the damage that could be done by this equipment. Again it is important to talk to your insurance broker to discuss your insurance needs.
