How do you properly insure a home based business?
With both technology and the internet, more and more people are running home-based businesses, either full-time or part-time. But will a homeowner's insurance policy cover the risks of a home-based business? In nearly every case, the answer is no. The only exception to this might be if a homeowner's insurance policy has a special endorsement, such as an endorsement to run a day care operation from your home. (And even then, it may be better for you to get a separate Daycare Insurance Policy) Yet fewer and fewer insurance companies offer such endorsements. Additionally, some home insurance policies may give a very limited amount of coverage for business property, such as a computer. The bottom line is, nearly all homeowners insurance policies clearly exclude business operations and not having a proper coverage in place can leave you with uninsured exposure. This is why you need separate business insurance to cover your home-based business risks.
Home-based business owners may feel that they do not need insurance coverage because nobody steps foot on their premises. The problem is that liability claims often happen away from the business premises. This can include a number of scenarios, including someone taking action for information on your website or someone getting injured from the product or service you provide. Most business insurance policies include coverage for personal injury lawsuits, which means someone takes legal action against you for things like libel or slander. Competitors and customers both can sue a business owner for personal injury. A business liability insurance policy also covers off-premises injury, such as if someone trips on, slips on, or is injured by any kind of property you take out in the field. It will also cover you during trade shows and usually meets the insurance requirements that some trade shows may require.
From a property standpoint, any business property you may have in your home is usually excluded or has very limited coverage under a homeowners insurance policy. Getting a business property insurance policy to protect your computers, equipment, furniture, inventory and any other physical assets helps keep your business in operation with minimal disruption and financial loss. A business insurance policy also usually covers loss of income, which is payment for income you did not earn as a result of a loss covered under your policy. Policies may also include coverage for things like valuable papers, damage to property of others, property coverage off-premises and a number of other additional coverages.
A business owner's policy includes the coverage described above, and is specifically designed to protect the unique interests and property of a business owner. This insurance package policy includes nearly all, if not most, of the coverage you need. However, if you are providing some kind of professional advice, consulting, or other non-tangible professional services, you may also need a professional liability insurance policy. This is also known as Errors & Omissions Insurance. In addition, if you have any employees, you are probably required by law to get Worker's Compensation Insurance. Depending on the type and size of business you own, you may have further insurance needs.
Hoping that your homeowner's insurance policy is going to cover you in the event of a claim will leave you frustrated if your business experiences a loss. Businesses have a much higher risk than a homeowners insurance policy allows for, and homeowners claims adjusters will quickly deny coverage for business-related claims in the event of a loss. Talk to a Trusted Choice Independent Insurance Agent today to explore your business insurance needs and options.
Huff Insurance is a full service Independent Insurance Agent We have been dedicated to Protecting Lifestyles™ since 1960. We offer a full array of Personal Insurance, Commercial Insurance and Life Insurance & Health Insurance products. Call us at 410-647-1111.