Wednesday, April 16, 2008

Is Insurance Necessary For A Home Based Business?

Having insurance is like saying;” It’s better to have it and not need it
Than to need it and not have it” Insurance is just one of those necessary
Expenses. Let’s discuss some determining factors regarding insurance.

When starting a home business you may want to check with your local,
State or county Business Licensing Division. It may be a requirement with
Your Local Government for you to obtain Liability insurance, particularly if
You have people coming to your home to transact business. This is another
Area in itself and may be prohibited by a number of municipalities. The emphasis
Here is for you to check and see what all the stipulations are about running
A business out of your home.

Do you plan on having any product relating to your business at your residence?
You may want to consider insuring your product for any potential loss, fire, theft,
Etc. Check with your insurance agent, to see if your homeowner’s insurance may
Cover this. Most of them do not. You may want to look into an umbrella type of
Policy for your home and business.

Do you have a vehicle that you use on a consistent basis for business?
Your rates may go up if that is the case. The benefit to the negative aspect
Of higher insurance rates are tax deductions. A business use of a vehicle is in fact
Tax deductible. This should tend to balance out the higher cost of Insurance.

When thinking about potential losses it is always a wise choice to stay on the safe
Side. I know there are different opinions regarding small business owners and the insurance expense they feel they do not need. Not having business insurance may or may not work depending on how expensive of a business inventory you are currently storing in your residence. You may want to consider and weigh all factors. You may find that this expense (insurance) can save you a bundle for unforeseen events that results in a negative impact on your cash flow.

The least you should do is to talk with your agent and discuss your business plans. Let the experts give you their advice, so that you as a potential Home based business owner can make a more informed decision.

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