Is Your Home Business Covered?

30% of all homeowners run a business from home. If you’re among them, your current homeowner’s insurance policy may not give you enough coverage.

Most homeowner’s insurance policies cover less than $2,500 in business-related damages. Chances are this won’t be enough to replace important business equipment like computers and fax machines. You may also need more coverage if you keep your business’ inventory in your home.

Options For The Home-Based Business

If your business needs more insurance coverage, you have three options:

1. Additional Endorsements, or Riders, are the most affordable options. For a small increase in premiums, you can double the amount of coverage your homeowner’s policy provides for your business equipment. This is a good option if your business only generates a few thousand dollars a year.
2. In-Home Business Policies are separate policies designed specifically for home-based business owners. Much like homeowner’s policies, In-Home Business policies provide protection for damage and liability. These policies tend to start around $200 a year.
3. Business Owners Packages (BOP) are great for larger businesses that need more damage and liability protection. If you ran a home-based mail-order company that made several thousand dollars a year in profit, a BOP could be the best plan for you. These policies provide the same kinds of protections as In-Home Business policies, but with greater coverage.

Know Your Additional Home Business Needs

Depending on the type of business you run, you may need coverage not offered through the above plans. For example:

• Businesses that make food products often need to have additional liability protection. It is also wise to make sure that any expensive cooking equipment is insured.
• If you use a car or truck as part of your business operation, you should have a business auto policy to cover it. If a vehicle is used mostly for business purposes, it probably isn’t covered by your personal auto insurance policy. A commercial auto insurance policy will cover damages, liability, and medical expenses if the vehicle is involved in an accident.
• If you have employees, you will need Worker’s Compensation insurance. Worker’s Comp covers your employees in case of on-the-job injury. Worker’s Compensation insurance is required in many states.

If you’re running a business out of your home you should take a good look at your current homeowner’s policy. If your homeowner’s policy doesn’t give you all the coverage you need, consider your other options. If you plan on growing your business, you may need to upgrade your insurance plan.

Home-based businesses are getting more and more popular. Don’t let yours get ruined by not having the right insurance.