Insuring Your Home Based Business
According to the National Bureau of Labor Statistics, 3 out of 10 homeowners operate a business out of their homes. More than 66% of the estimated 20.7 million people who work at home are self-employed and run a home-based business.
A survey conducted by the Independent Insurance Agents of America found that 60% of home based business owners don’t have the proper insurance in place because they believed their homeowners policy would cover any potential business losses. Most homeowner policies provide only $2,500 in coverage for the business related property (i.e. computers and office related equipment, materials, etc.) located at the home and no business-related liability coverage. In most cases, homeowners insurance will not cover the following:
- You accidentally back into a vendors display at an exhibition or show
- Your business equipment is stolen out of your vehicle
- Your inventory is damaged by a leaking roof
- A power surge damages your computer
- Your cash box is stolen from an event
You Have Three Choices for Insurance for Your Home Based Business
- Homeowners Policy Endorsement: This is added to a homeowners policy to increase coverage on business equipment. There also may be the option to buy a homeowners liability endorsement for protection in the event someone—say, a delivery person—is injured on your property.
- In-Home Business Policy: An in-home business policy provides more comprehensive coverage for business equipment and liability than a homeowners policy endorsement. These policies, which may also be called in-home business endorsements, vary significantly depending on the insurer.
- Business Owners Policy: Also called a BOP, this plan offers the most comprehensive coverage for small- and mid-size businesses. It protects against many of the same things that in-home business policies do, but offers even more coverage.
Assess Your Insurance Needs
No matter which form of insurance you opt for you should ask yourself the following questions to make sure that you get enough coverage for your business.
- How many customers come into your home?
- How much inventory and equipment do you keep in your home? How much would it cost to replace them?
- What would be the impact on your business if a natural disaster forced you out of your home temporarily?
- You provide a professional service from your home? Have you considered Professional Liability Insurance?
Let us help you make an informed decision about your business insurance needs. Our licensed agents specialize in helping small businesses obtain the best coverage at the best price, give us a call today at 888-834-8619.