Home-based business insurance is often overlooked. Many home-based business owners own their own homes, and assume that their home insurance also covers their home-based business activities.
Not only is this not true, but your home-based business activities can void your home insurance. Home insurance covers people's homes. Using the home for other purposes that your insurer is not aware of, such as operating a home-based business, may invalidate your policy.
What kinds of home-based business insurance do you need? The answer depends very much on exactly what kind of home-based business you're operating.
While many home-based business owners rely on their home insurance to cover damage, loss and theft of property, all home-based businesses should also have home-based business insurance to cover contents in addition to the contents and/or property insurance provided by the owner's home insurance. As an illustration, look around your home office and make a quick estimate of how much it would cost you to replace the equipment surrounding you. These items need to be covered by home-based business insurance.
Most homeowner's policies have a limit of about $2,000 for claims in the event of a loss. How much of your home office equipment would you be able to replace for that amount if it was stolen?
As another consideration, does all the business equipment you use stay in your home all the time? Business equipment will only be covered by your homeowner's policy while it is on your premises. If you have a laptop computer or a PDA that you use outside of your home, you'll need separate contents and property insurance for it.
Another type of insurance coverage that all home-based businesses should have is additional general liability insurance. If your aunt is visiting and falls and breaks her leg, your homeowner's policy will cover it; if a client is visiting and falls and breaks her leg, it won't. General liability insurance covers injuries to clients and employees on your business premises and elsewhere.
We can help explain all of this in detail and customize it for your specific needs. Give us a call today.