Joining the wave of social trends and technological advances is more people working from home. Some people telecommute with their employer; others have decided to start their own home-based business. Congratulations if you made the leap to business owner. Along with getting a designated office area, you must now think of protecting your business with services such as Captive Insurance.
Risks are a natural part of being in business, with some being specific to your business. Identifying each one begins with a standard checklist that includes ways to insulate you and your business as much as possible.
Initial Risks to Consider
As you craft your business plan, build a website and get ready for the grand opening, here are a few other things to consider about the initial risks of having a business at your house.
- Business interruption – if you have to stop selling your products and/or services for any reason. You need an alternative to continue with business activities.
- Property loss – if there is physical damage to your home or property used to conduct business. You want coverage that replaces whatever was lost, whether it was a natural disaster or otherwise.
- Liability loss – if you become legally liable for damages or injuries to others that were caused by your business. You do not want one claim to put you into bankruptcy.
- Loss of key employees – you might start as a one-person shop, but eventually expand to hiring one or more employees. You want protection from the impact of losing a key member of your team to sickness, disability or death.
How Vulnerable is Your Company for Each Risk?
Vulnerability is determined by the probability – or odds – that something could happen and cause your business to lose time, customers or property. You also must consider what it would cost your business to recover from the loss.
Basically, this step helps you quantify which risks should be high on your list of concerns. While you want to be prepared for anything, being under prepared for a crucial event is just as bad as not getting insurance coverage. For instance, if you do not live in an area that is prone to floods or earthquakes, you may not need to buy insurance to protect your home from those types of natural disasters.
In general, most risks can be included in a policy designed for home based businesses. Most usually include coverage for you and up to three employees. Since this is probably your main income source, you want to get adequate coverage for anything that could put you out of business.