By: Wynand van Vuuren
In South Africa, small businesses comprise 30% of the total employment and a third of the total value added to the economy. If you’re one of these small business owners, and you run your business from home, it’s important to ensure that your business assets are insured correctly, and separately from your home contents.
It’s important to know the difference between running a business from home and having a home-based office where you work for a company that you don’t own, as your liability is different in these two scenarios.
If you have equipment at home that’s owned by a company, that you use to do business on their behalf, then it’s up to them to insure that equipment. There may be requirements in terms of you storing or transporting the equipment and you should check your employment contract or IT usage policy to safeguard yourself. However, running your own business from your home places the insurance onus squarely on your shoulders.
Running a business from home exposes you to more potential risks, and this risk needs to be disclosed to your insurer so that they can give you the correct premium and cover. Personal policies for buildings and home contents don’t take business-related risks into account, and this is why they may not cover your business equipment, any stock you’re keeping, or your liability to other parties, among other things.
If you don’t have cover for liability under a business insurance policy, and a client or colleague is injured while visiting your home business, you may be liable for costs in your capacity. Likewise, you need to have business insurance to cover loss of or damage to items that you use to run your home business. Even your car could be left effectively uncovered if your insurer doesn’t know that you use it for business purposes.
It is also important to work with a broker to determine your business’ unique risk profile. No matter what industry you’re in, your broker will advise you on how best to protect you and your home business against loss and damage.
* Wynand van Vuuren is a client experience partner at King Price Insurance.