If you run your small business from your home, you may think any losses or damages would be covered under your homeowner’s or renter’s insurance, but that’s typically not the case. Are you underinsured or uninsured when it comes to your small business? Let’s take a look at the type of coverage you may need.
Business property insurance
If you have a substantial amount of property related to your business, you probably need business property insurance. If you only use a computer for your business that you also use for personal use, your homeowner’s or renter’s insurance may cover the loss up to $2500 – or it may decide to cancel your policy since you’ve been running a business out of your home.
If you have more than $2500 worth of business property, or your business property is something that would be difficult to pass as personal property, such as high-end video equipment, you will need additional coverage.
You may be able to simply add a rider to your current homeowners insurance policy without needing a separate policy.
Liability insurance
If a customer comes by your home and gets injured or the mailman trips while delivering a package related to your business, you won’t be covered for their injuries unless you get liability insurance specifically for your home-based business. If anybody who is in any way related to your business visits your home, you probably need additional liability insurance.
Product liability coverage
If you make products of any kind, you need product liability coverage in the sue-happy United States. Even something as simple as cloth-covered crinkle paper for babies could lead to a lawsuit if it suffocates a baby. Frivolous? Maybe. Expensive? Yes. Cover your assets with product liability coverage.
Business automobile insurance
Did you know that if you get into an accident when using your car for business purposes – such as making or picking up a delivery, visiting a client, or traveling to a trade show – that your regular car insurance won’t cover the damage? If you use your car in any way for your business, you need business coverage for it.
Professional liability (acts coverage)
If you run a type of business where your clients or patients could come after you for negligence or failure to deliver, you need professional liability coverage.
Other coverage
Depending on the type of business you have, you may need worker’s compensation, commercial crime, or other specialized types of insurance policies. Your professional insurance agent should be able to help you figure out what type of coverage you need.
Combined policies
Many times, commercial insurance needs are met by combination insurance policies. In-home business policies cover things that are excluded from your renter’s or homeowner’s insurance – such as theft or injury – but are less expensive than business owner policies. This type of policy usually only covers up to $10,000 in losses.
Business owner policies (BOP) are used by businesses to cover multiple types of potential losses and are the only option to cover more than $10,000 worth of damages. While a BOP is the most expensive option, it offers the most comprehensive coverage for your business.
If you work from home as an employee for somebody else, you may not need extra insurance, but you should talk to your employer and insurance company just in case to make sure you are covered.
Many people who run their businesses from home don’t realize until it’s too late that they don’t have enough or proper insurance to cover their business. Call your insurance agent today to make sure you’re fully covered!
