Why Should I Get Commercial/Small Business Insurance if I Have Personal Insurance?

Business owner in warehouse holding clipboard surrounded by boxes

It’s true that the world of insurance is full of so many different types of coverage that only an agent can really remember them all. Yet overlooking the differences between personal insurance policies and commercial or small business insurance could cost you. The homeowners policy or car insurance coverage you rely on daily does not necessarily extend to any business activities you do. Find out why it’s essential to carry both business and personal insurance, and what exact types you need, by reading more of Freeway Insurance’s helpful tips below.

What is Commercial Insurance?

The sphere of personal insurance includes many familiar lines of coverage, including:

  • Car insurance for passenger cars and trucks
  • Homeowners or renters insurance
  • Travel and vacation insurance
  • Pet insurance
  • Individual and family health insurance
  • Life insurance.

All of these policies are designed to protect you, your personal belongings, or your family. None of them include coverage for your business, no matter the size of that business. You may consider selling jewelry or backyard produce just a hobby, but if it produces income, it’s considered a business by the insurance companies. This makes it essential to carry both types of insurance rather than just hoping you don’t end up dealing with an injury lawsuit, a product recall, or a negligence claim against your work.

Separation of Business and Personal Assets

Even if you pay for your mortgage with the income from your business or the work you do at home, your business and personal assets are separate. This leads to scenarios such as this: a delivery person trips on your front steps and sues you, but your homeowners insurance fails to protect you because the package is determined to be related to your business rather than a personal item.

Obviously, retail and commercial buildings need separate liability and property policies. You, too, need a few types of small business insurance, even when you have no physical location. Separating your insurance also prevents the chances of losing your personal assets over a business liability claim. All businesses, no matter how small, even if they barely produce income, need the right combination of insurance types such as:

  • Property insurance for damage to your store, warehouse, or manufacturing facility
  • Liability insurance for both real estate and products you sell or rent
  • Errors and omissions insurance for professionals providing services, including lawyers, therapists, re-modelers, and architects
  • Commercial car insurance for covering accidents and theft during your work.

Protecting a Home-Based Business

Working from home as an employee is usually not an issue, but when you’re self-employed instead, the responsibility for commercial insurance shifts over to you. Stay-at-home parents who turn a back bedroom into a craft studio and start selling hair clips or knitted hats online could end up the target of a major lawsuit due to copyright infringement or a faulty product. You might be following all the local laws regarding food safety when selling your kitchen-made jellies and jams, but a customer from another state could try to apply their locality’s laws to you. Even relatively simple online work like translating or transcribing material could leave you open to liability lawsuits over errors and omissions. Your homeowners insurance does not cover any of these scenarios or practically any business related problem.

Request a business insurance quote online from Freeway Insurance today and we’ll help you find best insurance to protect your small business. You can also contact us by phone at 800-777-5620 to speak to an insurance expert who can answer your questions and find the right business insurance plan to fit your needs.