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Is Your Business Insured?
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If you're running a business out of your home, it might be a good idea to check into the coverage your current homeowner's insurance does--- or doesn't--- provide, when it comes to protecting your business assets.
 
According to insurance brokers Allen Lawrence & Assoc., homeowner's policies typically provide limited coverage ($2,500) for business equipment. In addition, income losses due to a business interruption may not be covered by a homeowner's policy. Do you have customers visit your home showroom? These brokers advise that you check into your liability coverage, in case someone hurts themselves during business hours.

 
This article outlines three basic ways to help provide adequate coverage for your home-based business, depending on the size and needs of your business:

  1. Small Business: Obtain added coverage ("endorsements") to your existing homeowner's or renter's policy. You may be able to increase your policy limits and include some general liability for a relatively small additional premium.
  2. Mid-Sized Business: Buy an "In-home business policy." This is a policy specifically designed for home-based businesses, and can include not only higher limits on coverage for business property and office equipment, but may also provide business interruption coverage if you're unable to operate your business because of damage to your home. You may also be able to cover losses of important documents and records, accounts receivable, and even offsite business property.
  3. Larger Business: Buy a BOP (Business Owner Policy). These would generally be recommended for larger businesses with fairly extensive operations, including offsite assets and activities. Typically, a BOP covers business property exposed to such risks as fire, smoke, hail, wind, theft, vandalism, and some forms of water damage.
     Insuring your home-based business is strictly a business decision on your part, and needs to be carefully considered in terms of cost-benefits and your budgetary restrictions. We're not recommending you increase your current coverage; only that you assess what you've got, and think about whether you might require more.

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