The Internet and World Wide Web are enabling home businesses to grow rapidly. There are important insurance issues to consider if you are one of these professionals who work from home.
Most likely, you already have a homeowners policy to protect your home and your contents. However, homeowners policies only cover your home-based business. The majority of homeowners policies will only cover $2,500 in losses due to business at home.
Perhaps you don’t worry about needing to replace a lost or damaged PC or printer. However, you should consider other liabilities that could place you in financial difficulty. What liabilities might a home-based business owner be exposed to?
For starters, customers could be injured in their home if they come to you for appointments or meetings. The suit could result in a lawsuit. Your homeowners policy likely wouldn’t cover it. Maybe someone delivers a package to your home and causes an accident or falls in your driveway. What can you do to protect yourself in situations such as these, which are business-related but happen at your home because that’s where you do business full-time or part time?
There are several options to cover home business-related liabilities. A “combo policy” is a combination policy that covers both the home and the business. These policies can be combined with commercial liability insurance, homeowners insurance, and many other policies. Combining homeowners insurance with business insurance can help you save money. If you are a sole proprietorship, talk to your broker or agent about this type policy.
Another strategy is to add a “business endorsement” to your homeowners policy. This is a rider attached to your homeowners insurance that expands your coverage for your business. Your policy endorsement may cover theft, damage, or inventory depending on which insurance company you have. It can also include GLI (general liability insurance), which covers business-related injuries and property damage. You can save money on commercial insurance if your home business is eligible for this type. This policy limits the number of duplicate coverages.
Ask about exclusions when shopping for a home-business combo policy or business endorsement. This will ensure you are aware of what is and is not covered. You should also ensure that your policy covers all of your home and business liabilities. Many business owners buy insurance and then discover that their limit is not high enough after an accident, lawsuit or other occurrence. If your loss in a case, settlement, or judgement is $1 Million, and your policy limits were $500,000, you will have to pay the rest. Insurance is useless at this point. A umbrella policy is a way to increase your coverage. This type of policy is able to increase your coverage while saving you money.
Most home-based business owners don’t have to pay much for these policies. You can add business coverage to homeowners’ premiums for as low as a few hundred dollars per year. It’s possible to get it cheaper if you shop around both online and offline.
Although it may seem easier to run a business from your home than opening a shop or office in another location, there are still risks. You can protect your family, your home, and your business with the right insurance policies.
