home based business

Home Based Business- are you covered?

Unsure whether your policy has coverage? Ask us!


Slightly more than half of U.S. businesses — 51.6 percent — were home-based, according to the 2007 Survey of Business Owners (SBO), conducted by the U.S. Census. Only 6.9 percent of these home-based respondent businesses had $250,000 or more in sales and receipts, while 57.1 percent brought in less than $25,000. (For further information see the U.S. Census release.)

Whether you’re doing medical billing, building birdhouses in your garage, running a day care center, auctioning art on eBay or any one of the myriad of other types of businesses people run from their homes, you may not have adequate insurance.

Many people think their homeowners policy is all they need. But a typical homeowners policy may not provide enough coverage. The usual limit is $2,500 for your business equipment while at home and $250 when it’s off the premises.

Most homeowners policies specifically exclude business liabilities. Even though your at-home business may involve only yourself working just part time, you could still have liability risk. For example, someone may come to your home for a business purpose–such as delivering materials–and sustain an injury on your premises for which they believe you are responsible. Your homeowners policy would probably not cover the damages.


Protecting Your Home Based Business

High-tech communications and the Internet are making it possible for more people to become self-employed by offering services out of their basement or spare room. A home-based business creates a unique need for business personal property and business liability insurance. Most standard homeowner’s policies do not extend adequate coverage for a home-based business located in a person’s home. The main reason the homeowner’s policy does not cover liabilities for a home-based business is because the business is creating the accident or liability, not the home. Business owners should also think about the equipment needed to operate their business. Office equipment, inventory, and computers are just some of the items business owners need to think about when it comes to their insurance. Their homeowner’s policy may cover these items, but on a limited basis. Additional coverage would cover these items completely if there were a loss.

What to consider when you operate a home-based business:

  • How much will your homeowners insurance cover if there is a loss?
  • What coverage do you need in order to insure your business’ equipment? 
  • Could your business be added to your homeowner’s policy as an endorsement?

For answers to these questions and any others you may have about your home-based business, please contact us!

Find out how to protect your business and employees when working out of your home. http://ow.ly/o5IEZ