Like most new home-based business owners, you might believe that your Homeowners or Renters insurance coverage offers sufficient protection. That is unfortunate, because in most instances these policies offer little to no coverage for business-related losses.
Homeowners policies are not designed to cover business losses. Most offer a small amount of business property coverage, meant to cover incidental items, such as a computer used for office work.
Depending on your business, you might be able to purchase a Homeowners endorsement to cover your business property. Your insurer is naturally going to want to know more about your business. Questions such as what type of business, how long you have been in business, and how many employees are common.
If your business is small with a low risk profile, and with limited client visits to your home, your Homeowners insurer might offer limited liability protection. This protection would cover slips and falls when a client visits your office, which otherwise would not be covered.
If this option is not available, you might want to consider a Small Business policy. Your Homeowners insurer might offer a home-based business package for a reasonable premium, or another insurer can offer a package policy to cover the liability and property of your business.
Take a look at the following list. If one or more of the items below apply, you might want to consider a Business policy for your business:
- Business Property, Stock or Equipment greater than $10,000 in value. A Business policy will allow you to insure your office contents, equipment, and stock. A Homeowners policy will likely have little, if any, coverage for business-related items.
- Clients visit your office/use your product/depend on your service. Liability insurance can help cover your exposure to lawsuits resulting from slip and falls, product liability claims, personal injury claims, etc. Perhaps even more importantly, it will provide defense costs for such actions. Homeowners policies do not have coverage for business liability. In a few instances, you might be able to purchase an endorsement to allow coverage for slip and falls due to customer visits, depending on your type of business.
- Damage to your office/workspace would require you to relocate/find a temporary substitute. Extra Expense coverage in a Business policy will provide funds for a temporary office/workspace or cost of a mobile trailer near your damaged office site.
- An Error or Omission could result in a lawsuit that would need to be defended/could seriously damage your business. Errors and Omissions coverage will protect you from judgments and defense costs resulting from past mistakes.
- Damage to your workplace could cause you to lose business, perhaps even lose some customers permanently. Business Interruption coverage will help pay for expenses until your property is repaired or sales return to normal (depending on the policy form).
- Your employees use their vehicles to make deliveries or run errands for your business. Non-Owned Automobile Liability will protect your business in the event that your employee has a serious accident during the course of running an errand for your business.
Contact our office today for more information about your home-based business insurance needs!
