What You Need to Know About Insuring Your Home Business
Do you work at home full-time, part-time, or even just occasionally? Do you have business contacts or employees who visit your home? Do you visit other homes on business? Do you keep business data, records, and inventory at home? Most importantly, do you know that your homeowners insurance policy won’t cover your home-based business?
Regardless of how often you work from home or what type of business you are in, if you don’t have the proper home business insurance coverage, you’ll be liable for injuries, stolen equipment, and lost wages should an accident, theft, or emergency occur.
Keep reading to find out what you need to know to get yourself and your business fully insured.
Depending on your type of business and coverage needs, you have the following options:
- Endorsement (also called a Rider)
An endorsement on your current homeowners insurance policy is the simplest, least
expensive way to get your business covered. It is appropriate for someone who doesn’t
use expensive equipment, have any inventory, and has no need for liability coverage.
Accountants and writers are examples of at-home professions that can benefit
from this type of coverage.
- In-Home Business Policy
A more comprehensive coverage, in-home business insurance policies protect up to
three full-time employees, generally. These policies include liability insurance and
will reimburse you for the loss of inventory, equipment, important records, computer data, and accounts receivable. Also, it reimburses you for lost income should your home be involved in a disaster.
- Business Owners Policy
In addition to the above-mentioned coverage, a business owners policy offers higher
limits (more than $10,000 of coverage), off-premises product liability, protection against
malpractice claims, and additional liability coverage for company drivers.
- Commercial Package Policy
If you run a commercial operation out of your home, especially if it’s high risk such as an
auto repair shop, commercial coverage is needed as it includes Workers’ Comp.
Costs of each of the above insurance coverage options range from as little as $25 up to $2000 per year. For a relatively low price, your home-based business will be protected from equipment failure, theft, loss of income, and malpractice or injury lawsuits. On top of that, you’ll be able to enjoy peace of mind knowing you are covered in an emergency.
Tips and Considerations
Remember, your homeowners insurance policy most likely will not cover your business in the event of loss or liability. Here are a few other tips and considerations to keep in mind.
- If you use your car for business, even if it’s only occasionally, make sure it’s covered and be sure to increase your limits.
- Keep your costs low by having a safe working environment, using a computer backup system, and installing a security system.
- And, of course, the number one tip is to talk to a certified, experienced insurance agent who will answer all of your specific questions concerning your insurance options.