Home Based Business Insurance: Picking the Right Coverage
April 19th, 2018 by admin
The idea of ending your daily commute and working from home is attractive to most people. Before you make your decision to bring your business home, though, there are a few essential details, related to insurance; you need to know.
Your Homeowners Policy Does Not Protect Your Business
It’s true. You need additional coverage to protect your business interests when you work from home. Finding the right protection in a home-based business insurance policy can be tricky. Which is why it is so important to work with a trusted independent insurance agent to make sure you are receiving the right type of insurance coverage for your business.
What Kind of Coverage Do You Need?
Unfortunately, that isn’t as simple of a question to answer as it sounds. To find that answer, you will need to answer a few questions of your own, including the following:
- Do customers or clients visit your home?
- Do you keep inventory, samples or business supplies in your home office?
- If you had to close your office because your home is damaged, would you lose income?
- Do you have employees who work in your home office or outside of your home office?
- Do you keep records related to employees or clients on your computer?
- Do you get deliveries to your home for business purposes?
Answering these questions will help your insurance agent determine the right kind of protection for your business. The agent can then make recommendations that are customized to your needs rather than offering a one-size-fits-all policy that never really fits.
Types of Home Business Insurance You Might Need
Some types of home business insurance are relatively common. You might want to consider one or more of these policies as a foundation for your commercial insurance coverage. Add on endorsements or additional policies if you want something more specific in your insurance coverage.
Homeowner’s Policy Endorsement
Sometimes, this is all you need. This protection is limited to business equipment (like computers, printers, fax machines, etc.). The average policy limit is between $2,500 and $5,000.
If you receive visitors, you should consider adding a homeowner’s liability endorsement. This is ideal for people who may only receive a few packages each month, but have no clients visit their homes.
Business Owners Policy
Often referred to as a BOP, this policy is the standard for most small businesses. It offers broader protection than the in-home policy or the home business endorsement. In some cases, especially if you have a lot of inventory, employees, or will lose income if your home office is damaged, this might be the perfect policy to meet your needs. If you have employees in New Jersey, you need workers compensation coverage as well.
Other Business Insurance Policies
Other business insurance policies to discuss with your agent include cyber liability/data breach insurance coverage, ELPI, professional liability, general liability insurance, and business auto insurance.
The finer points of coverage vary significantly from one provider to the next. Working with an independent insurance agency provides you with the opportunity to explore your options and find the plan that best matches your needs.