Home-based businesses must secure both property and liability coverage. Some small enterprises may find adequate protection through homeowners policy endorsements or in-home business policies; however, most require their standalone policy with higher limits.
Whether making candles or creating apps, we have you covered in home-based businesses. Contact us today so we can start helping you get your business up and running!
Property Coverage
Home-based business insurance provides valuable property coverage for individuals who work from their homes, especially if their inventory or expensive equipment such as computers or printers are stored there. Most small- and medium-sized businesses can obtain such protection as an endorsement to their existing homeowner’s policy at a relatively low cost; more extensive or specialized operations may need separate commercial policies instead.
At the heart of it lies your risk factors; those who might benefit include writers, direct sales representatives, computer consultants, and independent contractors. Furthermore, those whose businesses entail frequent client or customer contact may require professional liability (errors and omissions coverage) coverage to protect them against claims arising from services they provide or products they sell.
Consider whether visitors to your home-based business require medical care, which may not be covered under standard homeowner policies. Furthermore, those using delivery vans for merchandise or service supplies may need an independent commercial auto policy to cover damage and loss to both vehicles and cargo contained within it.
Insurance Information Institute reports that many insurers offer home-based business endorsements that can be added to a standard homeowners policy for under $20 annually. Not all businesses need this level of coverage. However, those needing extra coverage should consider purchasing an in-home business policy that offers general liability, property, and business interruption coverage in a single package. Employers of employees typically require workers’ compensation insurance and commercial auto policies. An experienced broker can help determine what forms of coverage are necessary based on your unique situation while ensuring you don’t overpay or miss out on essential forms of protection.
Liability Coverage
Home-based business insurance should always be considered whether your business operates from a garage or provides in-home massage services. Such coverage can help cover equipment damage and liability claims in case someone gets hurt during their visit to your house, as well as income losses if your operation has to close temporarily or permanently.
Homeowner’s policies typically provide up to $2,500 of coverage for home-based business equipment. If your equipment exceeds this value, however, a separate home-based business insurance policy or adding an extended rider could provide extra coverage. Furthermore, adding vehicle coverage will also provide essential protection if business equipment involves transporting it in a vehicle.
Though home-based business insurance can be purchased independently, including it as part of a Business Owner’s Policy (BOP) may be more economical. A BOP bundles general liability and property coverage into one policy tailored for any size business; you can even tailor it further with other types of procedures, such as workers’ comp or commercial auto, if desired.
Your insurer can assist in selecting the appropriate options for your home-based business. They may suggest adding an endorsement to your homeowner’s policy that provides up to $10,000 of coverage for business equipment, or you could go with a more comprehensive standalone approach offering higher limits and better range.
If you’re uncertain of the insurance requirements for your home-based business, speak with a licensed small business insurance agent or broker. They will walk through questions designed to assess risks and determine which coverages best suit your situation; whether that be homeowners’ endorsement coverage, whole business liability policies, or somewhere in between; and provide quotes and help secure this coverage through trusted providers.
Business Interruption Coverage
Business interruption coverage (also referred to as “business income”) provides financial compensation in the event of a disaster that forces you to close down your operations, replacing lost earnings as quickly as possible. It is typically included as part of a standard Business Owners Policy (BOP), though separate policies can be purchased separately.
For business interruption coverage to apply, its cause must fall within your property insurance policy’s coverage perils. Therefore, to maximize recovery from such policies your organization must keep accurate records on financial history and profit forecasting so you can substantiate claims made against them.
Example events covered include natural disasters such as tornadoes or fires, equipment breakdowns, and civil authority-mandated shutdowns. Home-based businesses may need errors and omissions (E&O) coverage to guard against claims for mistakes, negligence, inadequate work, or misrepresentations that could cause lost revenues.
Forced closure can have severe repercussions for employees and vendors. Not only could you lose business income, you might not be able to pay employee wages or vendor invoices in time; furthermore, renting or buying new equipment might become necessary to continue operations.
However, an effective business interruption insurance policy can cover many of these expenses. To learn more about this coverage type, it would be a good idea to contact a reputable provider of business insurance policies.
Home-based business insurance policies can be an ideal way to safeguard any small company, whether you employ full-time staff or are starting alone. Coverage includes property, liability, and business interruption – which will protect against many risks that accompany running an organization from a home office. Reach out today – our agents are ready to provide comprehensive protection for your expanding company!
Business Owner’s Policy
Millions of people operate businesses out of their homes, yet their homeowner’s or renters’ policies may not cover these activities. If you use your home for non-covered business activities, your personal property could be at risk, and potentially costly lawsuits filed against you could ensue. A home-based business policy can help safeguard assets and cover unforeseen costs should your operations go awry.
Home-based businesses need three coverages: homeowner’s endorsements, an in-home business policy, and a business owner’s policy (BOP). An endorsement may add several thousand dollars of coverage for personal property used for work-related items on your policy; an in-home business policy typically provides up to $15,000 worth of fire or peril losses after your home insurance deductible has been met, while a BOP offers higher limits and more comprehensive protection with both property and liability coverages included in its ranges.
No matter the nature of your home-based business, Next Insurance offers customizable policies designed to meet the unique needs of various companies ranging from single operators and lawn care specialists to larger organizations like accountants and hairdressers. Furthermore, its policies cover trade professionals like plumbers and electricians who perform services in client locations.
Small business owner policies often combine general liability, commercial property, and business interruption coverage into one comprehensive approach that you can tailor to meet your company’s unique needs. You may also opt for separate policies for each form of coverage if preferred.
Home-based business insurance costs vary significantly depending on the risks your home-based business faces and which coverage options you select. A low-risk general liability policy typically costs less than $11 monthly, while professional and product liability can cost significantly more.
Talk with an insurance expert regarding your small business insurance needs. He or she can help determine the available coverages, their associated costs, and which provider offers the best deal. Or use websites offering multiple quote comparisons to make an informed decision.
