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Protecting Your Home Based Business

You may be like the growing number of people who have left their job to start a home business. When you create a small home business, you need equipment such as a computer, printer or printer, or specialized equipment.  All those items are probably covered by your homeowner’s or renter’s insurance, but there is more cost.  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 a more comprehensive coverage for business equipment and liability than a homeowner’s policy. An in-home business policy can provide scope for lost income. In some guidelines, the range covers losses or damage from business activities at the insured’s home or rental residence and 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 at business-related activities at a trade show or a customer’s home. These policies, also known as in-home business endorsements, can differ significantly 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 of personal property. Things like vitamin samples, tools, and office furniture may be included. The coverage 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 of business property in your home.
• You meet with customers exclusively at their homes or at a neutral location like 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 such cases, a business insurance policy is the best choice. This fact is especially actual if you have clientele visit your home.  If a client is injured while involved in a business-related transaction or activity, homeowner’s or renter’s insurance may not cover the injury. Here are some other 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 plan to keep at least $5,000 of business property in your home.
• If you depend on income from your small home business to support your family.

There are a few other things to consider when deciding what insurance options for your small home business.  Factors such as being zoned for business, licenses, permits, vehicles used for your business, and taxes must 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.

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