Home Business Insurance Purposes and Benefits

You may think that you do not need a home business insurance plan for your home office. Your home or renters insurance will likely cover property losses. Business insurance, though, covers more than losses on your property or vehicle. The three main areas covered are property, worker's compensation and liability. Your home owner's policy will not extend into these areas regardless of how thorough the policy. You must purchase separate home business insurance to effectively protect yourself. There are significant financial benefits to seeking a policy as well.

Worker's Compensation
Worker's compensation policies protect you and your employees in case of a work place accident. What if you do not have employees? You may still consider a policy. Taking one for yourself may be less expensive than using your personal health insurance in case of a workplace accident. Also, if you have contractors working in the space, worker's compensation may cover them as additional insured.

Liability
Liability insurance is an often ignored but essential coverage. You are liable for anything you say or do in a professional capacity. Do you provide consulting advice? A disgruntled client can sue you, even if your advice is sound. Do you build websites? A client can sue you if their site is hacked. Small business owners stand to lose their entire life's savings in a law suit. Protecting yourself from catastrophic loss means paying small concessions along the way.

Tax Benefits of Home Business Insurance
Aside from protecting you from loss, home business insurance provides financial benefits to you. For example, you can deduct a portion of your home insurance from your taxes. First, determine the portion of your home which is a dedicated workspace. If you have another office, you cannot claim your home as a dedicated workspace. If your home office takes up 10% of the square footage of your home, then 10% of your insurance is tax deductible. The same applies for your automobile. If you use it for work 80% of the time, 80% of your auto insurance is tax deductible. Do you ever have your spouse or child help you in your home office? Consider hiring them as employees. By doing so, you may be able to deduct their health insurance from your taxes as well.

Marketing Benefits of Home Business Insurance
Tax deductions are great perks, but other benefits may come when you contract with a third party. Some outside contractors will not work with you unless you have a home business insurance plan. For example, if you are providing freelance work for a legal blog, the owners of that blog may be liable for your comments. If you have a policy of your own that covers you in this case, they can feel safe hiring you. Having insurance is a type of endorsement in today's world. It says to clients and contractors that you are running a serious business.

 

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