As a current or future home-based business owner in Hawaiʻi, you face many risks to your property, equipment, and reputation. You’re not alone; according to the U.S. Treasury, the number of applications for new businesses is soaring, particularly in home-based business services. With the right Hawaiʻi business insurance, you can manage the risks to your business while remaining compliant with Hawaiʻi’s laws for small businesses and protecting your valuable property from any situation.
This guide will help you understand why you need coverage for your home-based businesses in Hawaiʻi, the type of coverage you may need, and how to contact expert insurance advisors who can help in your specific situation.
What is Covered Under General Liability Insurance?
As the name suggests, general liability insurance protects business owners from various sources of liability. At first glance, home-based business owners may believe these protections overlap with their homeowners insurance policies.
However, home insurance policies often carry exclusions that can negatively impact home-based business owners. When a home is used as a place of business, homeowners insurance policies will not usually cover certain liabilities such as property damage and personal injuries.
Therefore, you will need separate business liability insurance to protect yourself, your property, and your other assets while you conduct business from home.
Consider these primary protections provided by general liability insurance:
- Property damage coverage pays claims on damage to your property that was the result of business operations. For example, a customer in your home-based store may accidentally break a window.
- Bodily injury coverage may include yourself, your family, your customers, or your employees. A slip and fall in your home-based business will not be covered by your personal homeowners insurance. General liability coverage protects business owners from litigation if someone is injured, files a lawsuit, or needs to pay medical expenses.
- Personal injury coverage includes the legal costs of defending you and your business in the event that you are sued.
Consider general liability coverage as a broad safety net that protects your business from the costs associated with common accident liabilities, including medical expense and legal fees. It’s important to know what exclusions may be in your general liability coverage; rely on your local provider to learn what’s covered and what isn’t covered in your current policy.
Is General Liability Legally Required?
In Hawaiʻi, general liability coverage is not legally required for your business to operate. However, in addition to paying out-of-pocket costs for liability claims, your business may be required to have certain coverage limits by third-party clients or in certain legal situations.
For example, if your business signs contracts with client companies, you may be required in your contract’s terms to have a certain amount of general liability coverage.
This is especially common for industries related to contracting or engineering since these businesses often handle large projects with multiple signees.
In other cases, your business may need to apply for a professional license, which is common in consumer medical businesses, accounting, and real estate, all of which can be home-based. Depending on your industry, general liability insurance may be required to obtain these licenses.
In other words, while Hawaiʻi law does not require you to maintain minimum liability coverage for every home-based business, your third-party clients, contracts, and licensors might.
What are the Benefits of General Liability Insurance for Home-Based Businesses?
While general liability coverage may not always be required, most home-based businesses can benefit from a versatile policy. Consider these key benefits of general liability coverage and how they may impact your business:
- Protect your business from the costs of employee accidents, such as medical expenses and liability claims.
- Cover your business assets and property from vandalism, fire, and weather damage, which is often excluded from home insurance coverage when the home is used as a business.
- Protect your reputation from claims involving slander or libel, including the legal costs of defending your business.
- Financially protect yourself from injuries sustained while performing business-related tasks.
- Protecting your financial and business assets from the financial damage of data breaches.
General liability coverage may provide even more benefits in your situation. Speak with an experienced local business insurance firm to learn more about how general liability insurance could impact your situation.
Contact Atlas Insurance to Protect Your Home-Based Business
Protecting yourself, your employees, and your valuable assets from the high costs of liability begins with comprehensive general liability insurance for your home-based business. Yet, many business owners find it difficult to understand the terms and exceptions of liability coverage while balancing their budget concerns. This is where personalized guidance can be a substantial benefit.
We’ve been helping local business owners just like you for over 100 years. Contact the local team at Atlas Insurance to learn more about the general liability coverage that makes sense in your situation to protect your business.