Home Based Businesses

Insurance for home-based businesses 

While working from home for many of us is quite enjoyable, if it is a home-based business. you need to be aware that an ordinary Householders may not pick up most of your risk. In fact, it may cover very little. You should make sure you have appropriate insurances in place to protect not only yourself but the future of your business.

Standard homeowner policies do not generally provide cover for many aspects of a home-based business. For instance, they may cover a home office up to a certain limit, but if you are holding stock, or building supplies used for a commercial project, your Householders policy will not respond to any loss or damage caused to it.

A standard Householders policy has a public liability section but will not cover someone who visits your home for the purpose of transacting business activities. Nor will it cover you if you visit a client’s premises and cause damage to their property or cause injury to them or their staff.

Insurances that all Home Based businesses need to consider are:

  • Public liability cover – protects you against claims for causing bodily injury or property damage to people visiting your business at home or if you visit them such as customers and suppliers.
  • Fire, Storm and Burglary cover plus other perils that could damage business equipment, inventory, tools of trade, office furniture or computer equipment. This can be while they remain in the home or if you take some of them with you to see clients.
  • Loss of income caused by an interruption to your business from such events
  • Workers compensation for any employees working from your home
  • loss of income due to personal accident or illness
  • marine policy if you send or receive products via freight carriers or post.

If you are a Professional person (providing services such as advice or treatment), you will need professional indemnity insurance. Then depending on the Profession, the policy may need to be specific to that profession such as Medical Malpractice for Allied Health Professionals or Defamation cover for writers or IT Liability Insurance for those involved in the Technology or Communication Industries.

If you are a Tradesman, the public liability cover will be geared to the Trade rather than simply a home office. But certain building trades may need blanket Construction Risk Insurance and Accidental Damage and Theft cover for Tools of Trade taken to sites. Further, your vehicle may be incorrectly classified for Private use and may not respond if it is Goods Carrying or used for a Business.

For people operating other types of businesses, you may need Machinery Breakdown cover or Electronic Equipment cover.

Certainly check with your Householder’s insurer about the extent of your current cover. Any advice should be in writing from them because in our experience, the Call Centre staff are very good at pacifying the client rather than tell them the truth. It is at claim time when a completely different set of staff interpret your policy very differently than what you thought they said on the phone. Proof or evidence kept with your insurance files are vital if not relying on an Insurance Broker.

In any case, utilise the services of an experience and well qualified Insurance Broker because they give Personal Advice and not just General Advice. Brokers can compare products when the direct insurers will not (because they refuse to give personal advice). It is also extra protection because Insurance Brokers do the buying for you and it is their duty to act in your best interests. In other words, to buy you the best cover at the best price.

So call a good one. Call CPR Insurance – experts who will save you!

  

Latest News

D&O premium pool ‘must treble’ to return to profitability

A new report – called "Show Me The Money!" by insurer XL Catlin and law firm Wotton + Kearney – is the second in a series of three white papers on securities class actions and their impact on the Directors & Officers Liability (D&O) market. The main conclusion is that Directors’ and officers’ (D&O) insurance premiums are under-priced significantly and need to rise strongly to restore profitability. The main risk areas are those exposed to securities class actions, 

It says Directors & Officer's Side A, Side B and Side C cover has been chronically underpriced since at least 2011, while the frequency of class actions is increasing as more plaintiff lawyers and litigation funders enter the space.

The analysis suggests last year’s overall premium pool of about $210 million would need to increase by at least three times to establish a profitable market, if it is assumed all other factors stay unchanged.

“Recent market developments would indicate most D&O insurers are now endeavouring to restore some semblance of profitability to their portfolios after years of market losses,” the report says.

read more

75% of Cyclone Debbie claims settled

In the 6 months since Cyclone Debbie devastated Queensland and parts of northern New South Wales:

• more than 31,000 homes and business have been repaired or received settlements from their insurance company

• more than 20,000 families have had possessions replaced

• more than 4,500 motor vehicles have been repaired or new vehicles provided

• hundreds of local builders and trades have been working on properties to repair the damage and destruction caused by the cyclone

• over $5 million has been paid EACH DAY to assist local communities, residents and businesses.

read more