Home Based Business Insurance
If you're working at
home -- STOP-- and review your insurance coverage. Your homeowners
insurance probably doesn't cover your business. A typical homeowners
policy provides only $2,500 coverage for business equipment which is
usually not enough to cover all of the business property. You also need
coverage for liability and business interruption.
To insure your business, you have three choices--endorsements to the
homeowners policy, an in-home business policy or a small business owners
Depending on the
type of business you operate, you may be able to add an endorsement to
your existing homeowners policy. For as little as $25 a year, you can
double your standard homeowners policy limits for business equipment from
$2,500 to $5,000.
Some companies have begun offering endorsements that include property and
limited business liability coverage. Endorsements are typically only
available for businesses that generate $5,000 or less in annual receipts.
They are available in most states.
2. IN-HOME BUSINESS POLICY
industry has responded to the growing number of home-based businesses by
creating in-home business insurance policies. For about $200 per year you
can insure your business property for $10,000. General liability coverage
is also included in the policy. A business owner can purchase anywhere
from $300,000 to $1 million worth of liability coverage. The cost of the
liability coverage will depend on the amount purchased.
If your business is unable to operate because of damage to your house,
your in-home business policy will cover lost income and ongoing expenses
such as payroll for up to one year. The policy also provides limited
coverage for loss of valuable papers and records, accounts receivable,
off-site business property and use of equipment.
In some cases, the companies that offer these policies require that you
purchase your homeowners and auto policies from them.
3. BUSINESSOWNERS PACKAGE POLICY (BOP)
specifically for small businesses, this policy is an excellent solution if
your home-based business operates in more than one location or
manufactures products outside the workplace. A BOP, like the in-home
business policy, covers business property and equipment, loss of income
and extra expenses, and liability. However, these coverages are on a much
broader scale than the in-home business policy.
If you are using
your automobile for business activities--transporting supplies or products
or visiting customers--you need to make certain that your automobile
insurance will protect you from accidents which may occur while on
In order to get insurance coverage that will not overlap with your
homeowners policy or leave any exposures, you should consult with an
insurance professional with experience in this field. To find an expert,
contact your home insurer.