In-Home
Business
If
you're running a business from your home, you may not have enough
insurance to protect your business equipment. A typical homeowners
policy provides only $2,500 coverage for business equipment, which
is usually not enough to cover all of your business property. You
may also need coverage for liability and lost income. Insurance
companies differ considerably in the types of business operations
they will cover under the various options they offer. So it's wise
to shop around for coverage options as well as price.
Regardless of the type of policy you choose, if you're a
professional working out of your home, you probably need
professional liability insurance. Some types of in-home businesses,
such as those that make or sell food products or sell home-made
personal care products, may have to buy special policies.
To insure your business, you have three basic choices, depending on
the nature of your business and the insurance company you buy it
from. They are:
- Homeowners Policy Endorsement.
You may be able to add a simple endorsement to your existing
homeowners policy to double your standard coverage for business
equipment such as computers. For as little as $25 you can raise
the policy limits from $2,500 to $5,000. Some insurance
companies will allow you to increase your coverage up to $10,000
in increments of $2,500.
You can also buy a homeowners liability endorsement. You need
liability coverage in case clients or delivery people get hurt
on your premises. They may trip and fall down your front steps,
for example, and sue you for failure to keep the steps in a safe
condition.
The homeowners liability endorsement is typically available only
to businesses that have few business-related visitors, such as
writers. But some insurers will provide this kind of endorsement
to piano teachers, for example, depending on the number of
students. These endorsements are available in most states.
- In-Home Business Policy/Program.
An in-home business policy provides more comprehensive coverage
for business equipment and liability than a homeowners policy
endorsement. These policies, which may also be called in-home
business endorsements, vary significantly depending on the
insurer.
In addition to protection for your business property, most
policies reimburse you for the loss of important papers and
records, accounts receivable and off-site business property.
Some will pay for the income you lose (business interruption) in
the event your home is so badly damaged by a fire or other
disaster that it can't be used for a while. They'll also pay for
the extra expense of operating out of a temporary location.
Some in-home business policies allow a certain number of
full-time employees, generally up to three.
In-home business policies generally include broader liability
insurance for higher amounts of coverage. They may offer
protection against lawsuits for injuries caused by the products
or services you offer, for example.
In-home business policies are available from homeowners
insurance companies and specialty insurers that sell stand-alone
in-home business policies. This means that you don't have to
purchase your homeowners insurance from them.
- Business Owners Policy (BOP).
Created specifically for small-to-mid-size businesses, this
policy is an excellent solution if your home-based business
operates in more than one location. A BOP, like the in-home
business policy, covers business property and equipment, loss of
income, extra expense and liability. However, these coverages
are on a much broader scale than the in-home business policy.
A BOP doesn't include workers compensation, health or disability
insurance. If you have employees, you'll need separate policies
for these coverage's.
- Automobile Coverage.
If you are using your car for business activities --
transporting supplies or products or visiting customers -- you
need to make certain that your automobile insurance will protect
you from accidents that may occur while you're on business.
Contact your home or auto insurer.
