If you run a home-based business, you need to ask yourself a few important questions:
If you answered yes to any of the above questions, your renters or homeowner’s policy may not provide enough protection for your small home business.
You basically have a few choices for insuring your home business. What you choose will depend on the type of business you have and the insurance company you buy it from.
Homeowners Policy Endorsement – It’s possible you might be able to simply add an endorsement to your already existing homeowners insurance policy. You might be able to increase your limits to include the cost of value of your business equipment such as computers. You also will want to double check to make sure your liability coverage is enough to protect you if clients or delivery people for your business come to your property and get injured.
If you don’t get a lot of visitors for your home business, then this will probably be a good option for you to explore. Be honest with your insurance provider and see if they will offer you something like this.
In-Home Business Policy – These types of policies will allow you to have higher coverages for business equipment than a homeowners policy endorsement might allow. The bonus with these is it’s possible that they could also reimburse you for the loss of important papers, accounts receivable, and perhaps even any off-site business property.
If your home is damaged by fire or natural disaster, it’s possible the policy will pay for lost income while your business was interrupted. If you have employees in your home business, then some policies might allow for coverages for them as well.
General Liability Policy – If you don’t have inventory or business property in your home, you might only need a general liability only policy. This will protect you if you’re sued for negligence, personal injury like a sip-and-fall or a faulty product you make.
Business Owners Policy (BOP) – The final type of policy that you might consider purchasing was created specifically with the small business in mind. The policy will cover both business equipment and property, loss of income, and provides you with liability insurance. A BOP is a great option if your business operates in more than one place. If you have employees, you’ll need to get separate coverages for workers compensation and health or disability insurance.
Following are a list of home-based businesses that are eligble for small business insurance with certain insurance carriers. This is not an exhastive list:
