Like most new home-based business owners, you believe your homeowner or renter’s insurance coverage offers sufficient protection. That is unfortunate, because in most instances these policies offer little to no coverage for business-related losses.
Homeowner’s 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 may be able to purchase a homeowner’s 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 homeowner’s insurer may 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 may want to consider a small business policy. Your homeowner’s 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 may want to consider a business policy for your business:
o Business Property, Stock or Equipment over $10,000 in value
A business policy will allow you to insure your office contents, equipment, and stock. A homeowner’s policy will likely have little, if any, coverage for business-related items.
o 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. Homeowner’s policies do not have coverage for business liability. In a few instances, you may be able to purchase an endorsement to allow coverage for slip and falls due to customer visits, depending on your type of business.
o 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.
o 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.
o 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)
o 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.