Q: I'm starting a consulting business. Is there any reason I shouldn't start with a home office?
A: Not really, unless zoning regulations in your area prohibit business operations. Be sure to check to make sure you're in compliance.
Starting a home office is a practical way to save money as you get your business off the ground. It makes sense for many consultants who frequently travel to their client's offices and don't always need a separate workplace to operate from.
What won't be covered by Homeowner's Insurance for my business?
Homeowner's Insurance doesn't necessarily cover business activities and commercial property in your home. For instance, if work property is stolen from your home office, your personal insurance might not pay to replace laptops and other equipment that the business owns.
Your personal insurance also cannot protect your business from lawsuits regarding injuries that happen on your property. Say a deliveryman is carrying an order of office supplies to your door. If he slips on the icy sidewalk and break his leg on the concrete, your business could be liable. Because the deliveryman was delivering items for your business (and not you), you'll need liability coverage specifically for your business. General Liability Insurance offers coverage for this and many other basic business third-party lawsuits.
While running a consulting firm from your home can help you save money, make sure you budget for liability insurance. One cost-effective way to cover a home-based consulting firm is to get a Business Owner's Policy, which packages General Liability and Commercial Property Insurance into one policy that usually costs consultants around $500 in annual premiums.