How you can insure your home-based business.
If you are like many other small business owners and have chosen to run your company out of your home, then you may assume that your homeowners insurance has you covered. Unfortunately, this probably isn’t the case. Here’s what you need to know about insuring your home-based business.
Understanding What Your Home Insurance Covers
Your homeowners insurance policy may offer some coverage for your home business, depending on the scope of operations. For instance, if you have a home office that you work out of, then your home insurance may offer limited coverage for property and liability. However, if you receive regular foot traffic and/or store inventory at your home, then your insurer will consider you as running a full-blown business out of your home. In this case, you will need to secure a commercial policy to protect your business’s assets and operations.
To understand how relying on standard home insurance leaves you exposed, here are some of the general exclusions for home businesses:
- No coverage for data loss
- Limited coverage for business equipment (usually only up to $2,500 in coverage)
- No coverage for business records
- No coverage for loss of income if your home is damaged and business operations are halted
- No coverage for employee or customer injuries in your home or on your property
Securing Supplemental Coverage
If you need to secure insurance coverage for your home-based business, then you have some options. One way to secure additional coverage is with policy endorsements. Many insurance providers offer homeowners the ability to add endorsements to their existing home insurance policies to protect things like their business equipment and assets. It’s also possible to secure liability endorsements for your home business, but this coverage is subject to certain conditions. Typically, insurers only offer these types of endorsements for home businesses that receive few visitors and clients.
If the coverage offered by home business endorsements isn’t enough, then you can also secure a business owners policy (BOP). BOPs offer small business owners a range of basic commercial coverages in a single policy. Typically, BOPs offer general liability, commercial property, and business interruption insurance. Many insurance providers also give business owners the opportunity to customize their BOP coverage by securing additional coverage such as cyber liability, equipment breakdown, and product liability insurance.
If you need specialty forms of coverage not available through endorsements or a BOP, then you will have to secure separate business insurance policies. Because your home business may not have the same coverage needs as traditional small businesses, make sure you work with an insurance agent you trust to secure the necessary coverage.
This is what you need to know about insuring your home-based business. Do you have additional questions about your homeowners insurance? If so, then contact the experts at Weeks & Associates Insurance Services in Thousand Oaks, California. We are ready to assist you with all your home coverage needs today.