Coverage Options For Home Businesses
Posted on: 23 October 2019
If you have a home business, you should not assume that your home insurance policy can help with your business losses. Home insurance excludes business-related losses. You need coverage specifically for your home business. Below are three major insurance options you can use to secure your home business.
Home Insurance Endorsement
Some home insurance carriers will provide coverage to your business equipment at a small additional fee. This is called an endorsement. This is especially true if your business equipment isn't terribly expensive. Say you only have a few computers, a printer, and related IT equipment. Of course, the carrier will inform you of the endorsement limit.
You can also get an endorsement to the liability portion of your home insurance so that the coverage extends to your business clients. Of course, this is only necessary if your nature of business attracts physical clients to your location. You don't need it if you only deal with clients virtually, for example, if you are a freelance writer who gets assignment requests online.
In-Home Business Policy
Some insurance companies sell policies specifically for those who run in-home businesses. Unlike an endorsement, in-home business insurance covers multiple risks at once. For example, it may cover business liability, business property, and even loss of income, among other risks.
An in-home business policy typically offers more coverage and higher limits than home insurance endorsements, but lower than conventional commercial insurance policies. Such a policy makes sense if your business is growing, but you haven't reached a point where you need or can afford conventional business insurance. Coverage and limits vary by insurers, so do your research before buying such a policy.
Business Owner's Policy
Lastly, you may also need a business owner's policy (BOP) that is traditionally geared towards small and medium businesses. This policy makes sense if your business has grown and you have numerous assets, face multiple risks, and maybe even operate in multiple locations.
BOPs cover a wider range of risks and have higher limits than the other two forms of coverage discussed above. However, a BOP doesn't cover every imaginable risk your business may face, so you should get clarification on the coverage and exclusions before purchase. Fortunately, you can also endorse your BOP with additional coverage for other risks such as spoilage and forgery-related-losses, among other things.
Operating a home business, or any business, without insurance coverage is dangerous because you never know when trouble will strike. If you don't have a policy in place, consult an insurance agent to help you evaluate your options - one like United Counties Insurance Group.
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