Protecting Your Small Home Business

Home Business

You may be like the growing number of people who have left their job to start a home business. When you start a small home business, you need equipment such as a computer, printer or printers, or specialized equipment.  All of those items are probably covered by your homeowner’s or renter’s insurance, but there is more cost to consider.  Having your computer damaged or destroyed costs time and most likely will result in lost revenue and data; homeowner’s or renter’s insurance does not cover lost profits or intellectual property.  There is good news if you own a small home business, you can protect it; let’s take a more in-depth look.

Options to Protect Your Small Home Business

In-home Business Policy

An in-home business policy gives more comprehensive coverage for business equipment and liability than a homeowner’s policy. An in-home business policy can give coverage for lost income. In some policies coverage provided covers losses or damage not only from business activities at the insured’s home or rental residence but also off-site at a different place. This added benefit means the business property is covered while a business owner is in transit and gives liability coverage when at business-related activities at a trade show or a customer’s home. These policies, are also known as in-home business endorsements, can differ greatly depending on the insurer.

Increased Business Property Limits on Homeowners Insurance

Another option that small home business owners have available is to increase coverage limits on their homeowner’s insurance.  A homeowner’s policy could cover as much as $1,500 worth of personal property. Things like vitamin samples, tools, and office furniture may be included. The coverage basically protects the business merchandise or equipment you keep at home. It may also offer additional coverage for your business property while in your car or at a customer’s home. If this is not enough coverage, you may have the option to increase coverage with what is known as a homeowner’s policy endorsement.  It would be a wise choice if your small home business meets the following criteria:

  • You will have less than $4,999 worth of business property in your home.
  • You meet with customers exclusively at their homes or a neutral location such as a coffee shop.
  • You don’t have more than $750 worth of personal property intended for use in business away from your home.

A Business Insurance Policy

Some home-based businesses are not eligible for additional business property or in-home business coverage due to the kind of business or its annual Income. In cases such as these, a business insurance policy is the best choice. This fact is especially true if you have clientele visit your home.  If a client is injured while involved in a business-related transaction or activity homeowner’s insurance or renter’s insurance may not cover the injury. Here are some additional things to consider when deciding if you need a business insurance policy:

  • If you execute business transactions with customers at your home, such as bookkeeping or tutoring, which may require additional specialized liability coverage
  • If you are planning to keep at least $5,000 worth of business property in your home.
  • If you are dependent on income from your small home business in order to support your family.

There are a few other things to consider when deciding on what insurance options to choose for your small home business.  Factors such as being zoned for business, licenses and permits, vehicles used for your business, and taxes all need to be investigated. Your agent can help you to wade through all of the regulations and help you to determine what is the best way to protect your small home business.

Should you have any questions about protecting your small home business, contact us via email here or call us at (863) 646-LOCK.

About the Author Don

Don Westerfeld has been active in the field of Insurance and Financial Planning since 1997. Don grew up in Indiana later moving to Lakeland Florida where he continues to reside with his wife and children. When he’s not in the office you can find him enjoying the great outdoors. He has served on several charitable business and non-profit organizations and continues to provide guidance, advice and support to local charities.

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