It is not at all uncommon for businesses to startup at home, especially small-scale retail businesses. After all, operating your business at home means that you get to skip the expense of investing in a storefront and keep more of your profit. If you have a small retail business and you are just starting out from your home, you may assume that commercial insurance is not something that you will need. However, even for a small, home-based business, commercial insurance should be a priority. Here are three BIG reasons why you should go ahead and consider business insurance for your home-based retail business.
Your business inventory will likely not be covered under your homeowner's insurance policy.
If you have a retail business in your home, no matter how small it may be, it is likely that you will storing quite a bit of your inventory right in the house. This may make matters easier and more affordable, but if your home is damaged, this merchandise will likely not be covered under your homeowner's insurance policy because it is business related. Additionally, your business-relative equipment, such as cash registers, shelving, or computers, will also probably not be covered.
If someone is injured on your property, you will be held liable, not your home insurance company.
If a shopper stops by to check out the merchandise you have available, or even if a fellow supplier makes a delivery and gets injured while in your home for business purposes, you should not expect your homeowner's insurance policy to pick up the tab for medical bills. While a usual guest would be covered, someone visiting you relative to your retail business will not. Therefore, you could be held solely liable for the costs if someone is injured and you don't have commercial insurance.
Your house insurance carrier may drop you if they discover you are operating a business from your home.
Every homeowner's insurance company is different, but there are some that have strict policies against covering homes that also double as a place of business. It is best to discuss your retail business plans with your current home insurance provider right off the bat. Otherwise, if something happens in your home after the business starts, such as a fire or flood, your carrier may find you in breach of their terms and not cover anything at all--even the items not related to your business.