Understanding Business Insurance for a Home Business
More and more people are starting businesses operated from their homes. Often there is some confusion regarding the types of business insurance needed to adequately protect business property in your home. It is important to have a clear understanding about insurance for your home business.
Your Homeowners Policy May Not Offer Adequate Protection
Usually, one of the first questions asked on a homeowner’s insurance application is, “Do you operate a business from your home?” The reason for this question is that many insurers will not provide coverage for business operations. Some insurers offer limited coverage and may even offer a home business endorsement to your homeowner’s policy. In either case, the coverage probably won’t be adequate.
Probably the greatest risk of loss for a home business is liability for personal injury. Should the UPS man or a client fall on your property while conducting business, do you have enough liability insurance to pay expensive medical bills, loss of wages and other expenses that may be involved?
Your Home Policy or Business Owners Policy Will Not Cover Professional Service Errors
If you provide accounting, insurance or other professional services from your home, you need a professional liability insurance policy. This is sometimes referred to as errors and omissions insurance. You are responsible for the service and advice you give to your clients. General liability insurance, or even a home business endorsement, will not protect you if you make a mistake and are sued.
If You Use Your Vehicle in Business, You Need Commercial Auto Insurance
Even though you may have an auto policy that provides insurance coverage for very small businesses, it is probably not enough. If you transport goods or people, you need higher liability limits provided in a commercial auto policy. You should check with your agent to make sure you have the right insurance for any vehicle used in your business.
Even if Your Business Consists of Online Sales, You Need Business Insurance
Even with a home business endorsement to your homeowners policy, it will probably not provide adequate coverage to replace expensive computers, monitors, fax machines, printers and other office equipment. If your e-commerce site slows down or is completely crippled by a virus or hacker, you will lose valuable income. An endorsement to a business policy can offer coverage for the loss of income and any extra expenses involved.
Many home business owners just don’t bother with insurance. The lack of proper coverage could shut down your business and even cripple your own personal finances. Talk with your agent and make sure you have the right insurance for your individual business needs.