| The Home Office Association
estimates that 30 million people work out of their home, yet many forget to consider
the extent of their insurance coverage. Homeowners policies were never intended to cover
business exposures, and are therefore very limited in business coverage. If you own or are
starting a home business, please consider the following:
What kind of business coverage does your
homeowners policy provide?
Most homeowners policies cover only $2,500 in
business equipment used at home, and $250 away from home. However, you may be able to
increase your limits on business equipment with an endorsement to your homeowners policy.
In general, when assessing how much coverage you need, imagine that the room in which you
work at home is actually an office in a business building. Consider all items in the room
business property, and determine how much insurance you need based on their value.
Do you have liability coverage for your business?
Although some home businesses pose greater
risks than others, all need liability coverage for protection against lawsuits and damage.
If you can't get enough coverage by extending your existing policy, consider other
individual business insurance policies. Or, you can purchase a Business Owners Policy
(BOP), which combines property and liability insurance. Unlike homeowners insurance, a BOP
even covers your business income and extra expenses if you have to suspend operations due
to an insured disaster. Many policies can be customized to suit your needs.
|
 |
You may also want to consider purchasing disability and
life insurance policies. Disability insurance covers you if you become disabled, and
replaces lost earnings. The decision of whether or not to purchase life insurance depends
on how much of your family's income is derived from your home business. If it constitutes
a major source of income, purchasing life insurance may well be essential.
Will you be using your vehicle frequently for
business purposes?
Depending upon your business and the kind of
vehicles you own, you may need to extend your personal auto insurance or purchase a
separate business policy. Also, if you have employees who use their own vehicles to run
business errands for you, you may need non-owned auto coverage, which can be added on to
your commercial policy with an endorsement.
The Independent Insurance Agents of America estimates that
by the year 2000, 30% of the nation could be running home business. Whether you're a
current or future home business owner, please
contact us with any questions. We can help you identify the most
important areas of liability for your business and assist you in updating your coverage.
|
