Insurance for Businesses in Unconventional Locations

More and more business owners are seeing the economic advantage of basing their business in an unconventional locale, such as a home studio or office, or a shared space with a fellow entrepreneur. There are literally hundreds of types of business owners whose enterprises are perfectly suited for home offices or similar places, including: freelance writers, web designers, wedding and event planners, consultants of all kinds, photographers and other fine artists, tutors, music teachers, furniture makers, and many more. The phenomenon known as Etsy is a web-based community of literally thousands of business owners who sell their wares via the Internet and operate not from traditional stores but from virtual ones. This perfectly illustrates the increasing popularity of home-based businesses.

Business insurance is a must-have for all types of businesses. Business insurance typically covers policy holders in three crucial areas: workers' compensation, property, and liability. Most states in the U.S. requires business with employees to have workers' compensation insurance. While property and liability coverage are not always mandatory, they are certainly helpful, as they will protect your personal finances in the event that your business-related property is damaged, such as in a natural disaster, or if someone is injured because of your business.

But how does business insurance work for those who have home-based businesses or shared workspaces? Here's the lowdown:

Home Based

Business owner insurance still applies to those who conduct their businesses from home, and such individuals will reap the benefits of tax-deductible premiums. One you determine what percentage of your home is used for your business, you can deduct and equal percentage from your homeowner's insurance; before you do that, though, you should check with your accountant to see if there are tax implications down the road for doing this. If you count your own family members as employees, their health insurance will also be tax deductible. Because your homeowner's insurance may not cover the cost in the event that someone is injured while working for you at your home business, it's great to have the added protection of worker's compensation insurance for a home-based business.

Shared Workspace

Don't assume that just because you rent a portion of a shared workspace (for example, a part of a loft used by several professional portrait artists) that your insurance needs will be covered by the owner of the building. If one of your portrait subjects trips, falls, and breaks a leg while entering the building, will the building owner's policy come through with liability coverage, or do you need to purchase it? Get in touch with the building's owner to find out just what sort of claims will be covered by her property insurance, and make sure to fill in the gaps with your own. At the same time, be careful not to overpay for types of coverage that are already included in your building owner's policy.