Even some of the biggest and best branded products we now take for granted, started out being produced in garages and spare bedrooms. Unless you have the money to buy separate business premises from day 1, most people do most of their planning at home. When it comes to running a service, many people are based at home and travel out to meet customers. Even simple manufacturing can be done at home, whether it’s baking cakes and cookies in the kitchen, making designer clothes or some other low impact activity.
But whatever you do, don’t ignore the question of insurance. There’s a basic law of nature that says, anything that can go wrong, will go wrong (sooner or later). The longer you delay putting your house insurance in order, the more costly it may all become. So what are the main types to consider?
Let’s start off with the most obvious. The moment you start dealing with customers, some level of liability cover is essential. There’s always going to be one person who can prove what you did, or didn’t do, caused loss and damage. It may be you went into his home to repair a leaking faucet and the resulting flood damaged furniture and the wooden floor. Or perhaps it was the customer who came to your home to collect the PC you’d repaired and she slips and falls on your polished floor. No matter how you interact with customers or the customers may claim you have damaged them, some level of insurance pays the cost of your attorney fighting them off. If a court ends up ordering you to pay compensation, wouldn’t it be better to be able to pass on the bill to your insurer?
Then you should consider business interruption cover. There have been record-breaking numbers of tornadoes this year, rivers are flooding vast areas of our land. Any number of different causes can prevent you from continuing the business. So being able to cover the costs of a temporary relocation would be good value. If equipment or tools are lost, or inventory is damaged in the original disaster or during the move, being able to claim makes the cover even better value.
Then remember neither you nor anyone working for you will have perfect health. Can you afford to be without some health cover? Read this alongside all the local rules about Workers’ Compensation if you have employees. And then consider the potential need for disability insurance should you be unable to work. Finally, what would happen to your family if you were to die? Think about how much money might be owing if the death was unexpectedly early. This is not just for the mortgage and household debts, but also any loan taken up by the business and any business debts owed by you as a sole trader or partnership – this would not apply if you were running a company.
Getting the right levels of small business insurance is all about balancing the different elements of cover. Not everything may be required but, if you don’t think about all the issues, this would be costly. Get business insurances and protect your small business.