Many successful new small business owners and sole traders started out in the family garage or spare room. The internet is creating new business opportunities. More and more home-based businesses are being created. Many online business owners and sole traders sell their goods and services on the internet and ship them to front doors around New Zealand each day. Just because you can run your small business wearing shorts or track pants doesn't mean that it's not a real business with real business opportunities created when they work from home. So, every home based business needs to be insured just like any other bricks and mortar commercial enterprise.
What Cover Do I Need For My Equipment and Stock?
If you use any kind of equipment to run your home based business, or when you work from home, then you ought to consider buying a business material damage insurance policy. Your homeowners' policy doesn't typically provide cover for sole trader business insurance.
Business insurance for material damage cover is recommended for assets such as the computer you work on or the equipment you use to produce your products, or desks, a printer, internet modem and mobile phone, as they will be a major source of your income and how you work. Business material damage insurance will cover business owners for loss or damage from power surges which could damage vital electronic equipment or refrigerated goods. It will cover stock such as cosmetics and clothes that business owners distribute or material used in your trade, brochures or packing, mailing and shipping material. It will also cover property whilst in transit anywhere in New Zealand.
Home-based small business owners can extend cover for loss or damage as a result of earthquake, tsunami, volcanic eruption, hydrothermal or geothermal activity or fire following any of these. Cover can also be extended to include business interruption insurance for your online business.
Why Do I Need Business Interruption Insurance?
What if your home office is damaged and a business owner or sole trader is unable to operate or need to move premises? One of the biggest concerns any business owners who work from home have is their ability to continue in business after a large loss. If a property loss prevents you from providing products or services to your customers, they may go elsewhere and never return. Your expenses such as wages, rent and loans will still need to be paid. That’s where business interruption insurance comes into the frame for home based small business owners.
Our business interruption product covers a shortfall in profit due to a drop in revenue, the cost of engaging an accountant or other professional to prepare your insurance claim and the additional increase in costs to resume your business. These increased costs can include re-writing valuable papers and records - it will get you back chasing business opportunities. They also include relocation and temporary equipment to operate replacement premises. You can chose cover for up to 12 months of business interruption, up to 18 months and up to 24 months.
Is Public Liability or Employers Liability Insurance Recommended?
If you invite employees and clients into your home based business, you must be able to cover the costs of any potential injury or personal damage. It is unlikely that your homeowner’s insurance will be able to cover the cost of these potential damages in home. So, specialised coverage is paramount. Public liability insurance allows you to cover these insurance claim costs. You can then focus on growing your business.