Coworking is now an undeniable staple in the business world, with a large percentage of both tech startups and traditional businesses flocking to these more tenant-friendly office arrangements. But with all the benefits and amenities that coworking offers, and the great lengths community managers go to to make your team feel at home, it can be easy to forget that there are some inherent risks. In any public or shared space, damaged, lost or stolen property should always be a concern, particularly when that property is exactly what your business needs to make a living. This is why coworking insurance should be at the top of your list of expenses.
Let’s explore why coworking insurance should be a priority for your space (both for managers and members).
Coworking spaces often provide most of the office amenities and equipment needed to work. These might include desks, chairs, high-speed internet, snacks and beverages and in some cases, desktops and presentation equipment, to name a few. Coworking managers and owners generally have business and liability insurance policies as required by the terms of their lease, especially if they do not directly own the property. However owners should be wary of relying the property insurance alone. In the event of a natural disaster or extensive damage to the building itself, property owners are likely to only be concerned with collecting damages for the property, not for any materials privately owned by the coworking tenant. Coworking owners should pay very careful attention to the liability clauses in their lease, and even then err on the side of caution and buy their own insurance policies.
And for members, items that are not provided by the workspace, such as personal laptops and computers, valuable business data and products that stay in the office, customer data, and any items that members buy to personalize their office, these are rarely covered by the coworking space. So in the event of an accident, theft, or natural disaster, an individual insurance policy can be a valuable safety net when all else fails.
Now that you have an idea of how important insurance is in the coworking space, we can get into the various types of policies and the differences between them. Understanding whether you need general liability insurance, professional liability insurance, or a business owner’s policy is essential when it comes down to actually buying a policy.
A lot of businesses often purchase general liability insurance. Some consider it the “standard” type of coverage because it covers third party bodily injuries, damage, and advertising injuries such as slander, libel, and copyright infringement. This is important to have because if someone gets injured in the coworking space, such as tripping over carpet or a loose wire, they can hold the coworking business liable for any medical and legal costs. Being caught in this situation without insurance would put the business at amazing risk. In addition for managers and owners, general liability insurance can save money in other ways like having to pay for repairs if a new machine breaks down.
Professional liability insurance is vital because this will protect you and your coworking space if a client feels you have not lived up to the professional standard you have advertised. This could be as simple as unfinished projects, or a making a mistake on a job, or perhaps not providing an adequate working environment. This type of insurance will not only protect you, but it also protects your clientele as well since they can recoup any money lost from professional services (or lack thereof) committed on your end.
Business owner’s policy, or BOP, is a combination of general liability and commercial property insurance. For members of a coworking space, this type of insurance might be of significant value. It will not only protect you from any injuries that might occur within the coworking space to another individual, but it will also protect you from any harm, damage, or theft that might occur within the commercial property itself. This would include if your computer is damaged or stolen within the coworking space, something that is rarely covered by the commercial property itself.
No matter how comfortable you feel in your coworking space, or how “secure” the coworking space may advertise to be, it is still important to have an insurance if you plan on working within one. And for coworking managers and owners, it’s never safe to rely on the insurance of the property, especially if you are just one of many tenants. The truth is that accidents happen all the time, and it’s important for all the concerned parties (property owners, coworking managers, and coworking members) to be protected when the need arises. Having too much coverage is not a bad thing, and in the long run, it could save you and your business thousands of dollars.