Starting a REAL Home Business - Do You Have Business Insurance?
Did you know that over 60 percent of home businesses have no insurance coverage for their businesses (based on a survey by the Independent Insurance Agents and Brokers of America). And a fried computer can mean the end of your business.
If you are running your home based business as a real business, you need to consider business insurance. “But wait!” you say. “I have homeowner’s insurance. Doesn’t that cover me?” Well, yes, and no. Homeowner’s policies are not intended to cover home-based businesses.
Just as a refresher, here are the three types of insurance a business needs:
- Land, building, and personal property coverage, on structures, equipment, supplies, etc. This coverage protects you if something is stolen, or if there is a fire or other loss.
- Liability coverage, if something happens to a customer or someone who is on your property using your business. For example, if you have a home beauty salon, liability coverage might help you pay for a lawsuit by a customer who was injured while in your home.
- Business interruption insurance, to help pay business expenses while you are recovering from a disaster.
As I said, your homeowner’s insurance isn’t intended to cover you for business losses. Here are a couple more examples:
- If you have a woodworking shop in your garage or basement and you sell your woodworking products, you should have separate property insurance in case your woodworking machines are damaged or lost.
- If there is a fire in your home, the business interruption insurance can help pay your business bills while you recover from the fire. The property insurance would pay for damage to your business equipment.
- If you are running a day care business, you might need additional liability insurance for the children in your care.
Talk to your insurance agent. Find out what kinds of business insurance coverages you can get for a reasonable price, depending on the type of business you have. Ask about getting an “incidental business endorsement,” which is a rider on your homeowner’s insurance to cover your business, or a combination homeowners/business owner’s policy. The type of policy that’s best for you depends on the type of home business you are running.
If you are serious about running your home business as a REAL business, don’t wait until disaster strikes - get insurance now.
Tags: business insurance, business interruption insurance, home based business insurance, incidental business endorsementsShare This
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