Do I need commercial insurance for my part-time business?

October 8th, 2019

Business owners researching commercial insurance for small part-time business in their bakery

A part-time business can definitely be an exciting prospect. One question you’ll face as a part-time business owner is, “Do I need commercial insurance for a part-time business?” The answer is yes, you definitely need commercial insurance for your business, even if it’s only a part-time endeavour. Why? Your business inventory, premises, and liability won’t be covered by a home insurance policy. As soon as you’re being paid or doing business, your personal coverage won’t cut it. 

We’ll walk you through how you can protect your part-time business with commercial insurance and help you understand what protection you’ll need.

Business Property Insurance

If you operate your business part-time from your home, your home insurance won’t cover anything related to your work. This includes inventory, materials, equipment, tools, and more. Why? Your home insurance is designed to protect your personal property, not your business. Luckily, some home insurance companies offer special home-based business add-on to cover a part-time business you run from your home. 

If you operate your part-time business elsewhere, you definitely need commercial property insurance. This will protect all of your business-related property, including the building’s main structure, outbuildings, inventory, tools, equipment, inventory, furniture, and more. Commonly covered causes of damage include:

  • Fire
  • Smoke
  • Explosion
  • Electrical current
  • Lightning
  • Hail
  • Wind
  • Impact of vehicle or aircraft
  • Theft
  • Vandalism
  • Certain types of water damage (some, like sewer back up and flood require special add-ons which may not be available everywhere)

What’s covered will vary by your insurance company and individual policy choices. If you rent, the coverage will simply cover the contents of your premises that belong to you. Your landlord’s insurance will cover the structure and their own property – but it won’t cover anything that is yours.

Commercial General Liability Insurance

This is the standard liability insurance for businesses. It helps your business cover damages and legal expenses if someone is hurt or has their property damaged. This is considered to be the basic liability protection for any business, regardless of their size or industry.

Other Commercial Liability Insurance

Depending on your industry and what your business does, you may want to look into these other liability coverages:

  • Professional Liability Insurance – Also known as errors and omissions insurance, this coverage is essential if your part-time business provides professional advice or a professional service. Your clients can sue you for financial loss as a result of your advice or service – or your failure to provide it. Even if you’re innocent, you’ll still need to cover the legal expenses. This type of liability insurance helps cover those costs.
  • Product Liability Insurance – If you sell or manufacture products, this coverage will help cover damages and legal expenses if your product causes property damage or injury to someone who buys it. 
  • Cyber Liability – Cyberattacks are growing increasingly frequent and businesses of all sizes are targets. This protection helps you deal with and recover from a cyberattack or data breach.

There are many more options for liability insurance. Talk to one of our business liability insurance brokers to find out what coverage is best for your part-time operation.

How much does commercial insurance cost for a part-time business?

The cost of your insurance will depend on a lot of factors, including:

  • Your insurance and claims history
  • Your industry
  • Your company’s property value (or cost of rebuilding and replacing everything)
  • Annual revenue
  • Number of employees
  • Premies details (including the building’s roofing, systems, build type, and age)
  • Security or damage detection or mitigation devices (like alarms, sump pumps, et cetera)
  • Where you operate your business
    • The claim and crime rate of the area, proximity to a fire station and fire hydrant, and how near you are to risks like a river
  • Your insurance options

Tips to Lower Commercial Insurance Costs for Your Part-Time Business

Insurance premiums are another expense when it comes to running a business, but there are ways you can keep your commercial insurance rates lower:

  • Choose a higher deductible
  • Bundle your insurance with a single company
  • Only submit a claim if you cannot afford to fix the damage yourself
  • Consider installing preventative or detection devices
  • Follow risk management suggestions for your particular industry
  • Review your commercial insurance at least once a year

Our experienced commercial insurance brokers are well equipped to advise you about your part-time business commercial insurance. We can answer your questions, help you save money, and advise you on risk management. Contact us today for a commercial insurance quote or with your questions.

Comments are closed.