Protecting Your Home Business
There are millions of Americans who are operating full or part-time businesses from the comfort of their homes. One of the secrets to running a successful home-based business is being able to separate your business activity from your home activity.
Whether you spend two hours or 80 hours per week on your at-home endeavor, it remains a business with all the risks and rewards associated with owning a business. To safeguard against the risks, you need to be aware that your homeowner’s insurance policy offers limited or no protection for your business while it is being operated from your home.
If you rely on your homeowner’s policy as your only means of insurance protection, you may find your business uninsured or greatly underinsured in the event of a loss. .
Why Doesn’t My Homeowners Policy Cover My In-Home Business?
Homeowner’s policies were never intended to cover business exposures. Consequently, coverage for the items you use in your business such as computers, fax machines, filing cabinets, inventory and tools are limited to $2,500 in your home and $250 away from home under most homeowners’ policies. And your homeowner’s coverage provides no liability insurance for your home-based business.
How Do I Get The Coverage I Need?
First, let’s take a look at what coverage your may need. Insurance coverage generally falls into two categories. This is true of homeowners, auto and most business policies. The two categories are Property and Liability coverage.
- Property Coverage: This covers your business structures and business property (possessions) against loss or damage caused by perils such as, but not limited to fire, smoke, wind, and theft.
- Liability Coverage: This covers you if you become legally obligated to pay money to another person for bodily injury or property damage caused by your business. Your insurance company will cover those costs (up to the maximum indicated in your policy), including the costs of defending your business in the lawsuit.
What Are My Policy Options?
There are several types of insurance policies available for in-home businesses. They include:
- Incidental Business Endorsement: Depending on your business, you may be able to attach an “incidental business endorsement” to your existing homeowner’s policy which will cover other structures or equipment on your premises that you use for business. This endorsement can also be tailored to include your business liability.
- Business Owners Package Policy: If your in-home business does not qualify for coverage under the “incidental business endorsement” you can purchase coverage for your home-based business under a separate business owner’s package policy. These policies provide coverage for business property, business liability and replacement of lost income.
If your in-home business is your full-time occupation, you may need other coverages such as workers compensation, health and life insurance and a retirement plan. In other words, you may need to provide employee benefits to yourself. Some options to consider are:
- Workers Compensation: If you have employees, you will need to know about this type of insurance. Workers compensation insurance offers benefits, without regard to liability, should an employee become injured as a result of a job related accident or suffer an illness that can be linked to a workplace cause. Workers compensation also can cover you in case you are injured.
- Health Insurance: There are various plans available that cover doctor visits, hospital services, medical tests and other costs incurred in medical care.
- Life Insurance: The insurance company pays a stated amount of money upon your death to the person or persons named as beneficiaries by you.
- Disability Insurance: This insurance provides you and your family with an income when you are too sick or injured to work.
If you have a home based business, please give us a call. The agents at Assured Protection Inc. will work with you to determine the proper coverage you need for your business.
There is a difference. We are the difference
|
