How to Save Money When Insuring Your Home Business

Running a business from home can be a great source of extra income, especially in economically trying times like 2020. 

However, if you’re managing a small business, there are several things you need to do to protect yourself and your venture. Otherwise, you might end up in hot waters both legally and economically. 

Despite all precautions, accidents and mistakes happen. To avoid financial or legal calamities in unforeseen circumstances, having insurance is crucial. 

Here’s how you can save money when figuring out how to best insure your home business. 

Check Which Insurance Policies Your Business Needs

Start off by checking which types of insurance your business actually needs. This will help you avoid over-spending on policies you could do without. 

First, find out if your existing insurance policies cover business use. Home insurance policies, for example, often don’t cover business use of your home by default. Sometimes, though, it’s available as an add-on. 

Which additional kinds of business insurance you actually need to get depends on your niche. 

For example, you might not need public liability insurance if you’re operating fully online. If you’re planning on welcoming clients into your home business space, this type of insurance will cover you in case any of them are injured. 

Professional indemnity insurance is an asset if your business is consultancy- or service-based. It protects you if a client brings a claim against you for giving bad or negligent advice. 

If your home business is product-based, think about getting product liability insurance. In case a customer is harmed by one of your products, this type of insurance will have your back.

Carefully Compare Offers 

Next, carefully compare and contrast offers from different insurance providers. 

Apply the ‘Rule of 3’. This means you should ask for quotes from at least three different providers.

To get the best insights, either use online insurance comparison generators, or get the help of an independent insurance broker to navigate the market.

Be sure to check if it’s possible to get insurance bundles from one provider. Many insurance companies offer packages for small businesses, which come at much lower monthly costs compared to separate policies with different providers. 

Plus – having fewer providers makes admin easier. 

Review Existing Insurance Policies

As a next step, review any insurance policies you already have. 

A lot can change between contract periods. Maybe your business setup has evolved. A time-limited offer might have run out, or there might now be more competitive offers out there. 

In any case, comparing your existing policies with alternatives will help you make sure you don’t end up paying too much out of habit. 

Plus, you might find that you don’t have sufficient cover. For instance, the contents of your business may have changed, meaning they are now under-insured. Or perhaps a policy that doesn’t auto-renew is about to run out. 

Pay on a Yearly Basis or Focus on Flexibility

Finally, pay your premiums annually, if possible. In general, this can help you save considerably, though it makes monthly budgeting slightly more difficult. 

Depending on how fast your business is evolving, though – especially if it’s a start-up – you might favour flexibility. If that’s the case, check that you won’t have to pay any penalties for modifying your policy before the end of the contract period.

*This is a collaborative post.