Insuring Your Home Business
Millions of Americans run businesses out of their homes offering products and services to local neighborhoods or through the Internet to the international community. What home-business owners may not know is that their business supplies and inventory may not be covered under their homeowner’s insurance policy. And even worse, business activities in the home could void a homeowner’s insurance policy, so even personal items cannot be covered under it. You may need to seek counsel from an experienced attorney in the event your insurer rejects claims you make under your homeowner's policy.
How Should You Obtain Home-Business Insurance?
Typically, home-business owners can obtain insurance coverage for their businesses in one of three ways:
- An endorsement on a homeowner’s policy
- An in-home business policy
- A Business Owner’s Package (BOP) policy
Some insurers are willing to issue a rider that attaches to a homeowner’s policy, but usually, insurers prefer to sell an in-home business policy to cover the insurance needs of the business. These policies typically provide more coverage than a rider, which is important because the limits of a rider may not cover replacement of all business inventory and supplies.
Another growing trend that insurers offer is the Business Owner’s Package policy, frequently referred to as a BOP policy. In a BOP, insurers bundle numerous types of insurance to provide the home-business owner with more effective and cost-conscious insurance.
What Types of Insurance Should You Consider?
Depending on the services or products that a business markets, a home-business owner may need several types of insurance. First, a home-business owner should consider contents insurance for the business’s supplies and inventory. Second, general liability insurance may be necessary to cover accidents that occur on the property related to the business. For instance, if a technician performing maintenance on a business computer system were injured on the premises, general liability insurance would cover the injuries where homeowner’s insurance might not.
Your business may also need other types of insurance. Do you offer on-site services or repairs? You may want completed operations insurance to cover occurrences when a customer claims injury or damages after using something that you fixed for them. If you provide advice as part of your service, you may want errors and omissions coverage for situations when a customer claims damages from the advice you gave.
Is the business selling a product? In that case, product liability insurance will cover injuries or damages stemming from product malfunction. Does the business provide a professional service? In that case, professional liability insurance may be necessary to cover damages. Home-business owners may also want to obtain coverage on motor vehicles used for business purposes.
Get Insurance Coverage for Your Home-Business
You may not need every type of insurance out there, or you may find that certain insurance coverages will be more beneficial for you. But if you plan on operating a business in your home, you should obtain some type of home-business insurance coverage to make sure that you have at least minimal coverage in the event of an accident or injury related to your business.