How to reduce the risks of running a business from home

Running a business from home can have many benefits. If you have a family and would like to be able to stay close to them while earning an income, then operating from your home could make perfect sense. It can also be a good way to save on location costs.

With that being said, running a business from home comes with a fair share of risk, and you must know what the risks are before getting started. You will then need to do everything you can to mitigate them. Let’s look at how you can reduce the risks of running a business from home.

Get the proper coverage

Everything starts with insurance. You will need to take out insurance to protect your property since your business assets will not be covered by your homeowner’s insurance. Not only that but running a business from home without notifying your insurer could invalidate your home insurance, so you’ll need to learn about different types of coverage for your business and make sure to give them a call to let them know of your situation.

One of the types of businesses you’ll need to learn about is business hazard insurance. Business hazard insurance will protect your business’s property — specifically, computers, tools and equipment, valuable documents, and your inventory, among other things. It will also cover you if you can’t open your business because of property damage.

In addition to homeowner’s insurance, you will need to look into things like general liability insurance, errors and omission insurance, and commercial auto insurance, among others.

Conduct heavy background checks

If you’re going to have people coming into your home to work, you must conduct thorough background checks on every one of them. You don’t necessarily have to turn away anyone with a blemish on their record, but if there’s something that could put you, your family, or your property at risk, you should pay special attention to it and reconsider hiring the person. Performing credit checks will also help you.

Monitor remote employees

You also must make sure to keep an eye on remote employees and teach them sound cybersecurity practices. Have a strict policy for verifying emails and instruct employees to never open a file in an email or follow a link before they get approval. Teach them how to spot fraudulent emails and how to make solid passwords. And consider hiring a third party to monitor and limit connections to your network while backing up your systems to prevent interruption following an incident.

Separate your business and personal life

You need to have a clear separation between your business and personal life even if you’re running your business from home. You should never conduct business on your personal computer unless you have absolutely no choice, for instance. You should have one computer for business and one for work. You also need to consider switching to an LLC if you’re a sole proprietor and have a separate bank account for your business. Make sure to build business credit too and use credit cards under your business’s name to protect your personal assets.

These few tips should help reduce some of the risks most home-based businesses have to face. It would be a good idea for you to learn from other business owners and get all of your employees involved as much as possible.