If you have a home business, your homeowner’s policy probably won’t apply to your business. You need insurance for your home business.
Do not worry. You can get a standalone real estate home insurance policy or possibly add an endorsement to your homeowner’s policy.
You can choose from many types of business insurance. You should know that most homeowner policies would only cover you up to $2,500 for a home business property claim.
Once you know what coverages you need, you can combine your home business needs under one policy called a Business Owners Policy (BOP).
What is business home insurance?
Home-based businesses need some type of home insurance. How much you need and what type you need depends on the type of business you run.
If the equipment you use for your home business includes only a computer and printer as business assets, you may not need business insurance. But remember that $2,500 maximum claim limit on your general homeowner’s policy — would that cover you? That may not provide enough coverage.
Business home insurance covers you for business equipment and more. Do you need it?
Do you need business insurance for a home business?
For home businesses, there are a number of business insurance benefits:Equipment CoverVisitor CoverVehicle CoverCover to protect customer personal information provided to you, which you have stored on your computer. Cover to protect against claims against you in relation to your services or products (so-called professional indemnity insurance).
Remember that you have a drop-down menu for selected coverages and coverage limits that you can choose. You can unite those choices under the umbrella of an entrepreneur’s policy.
Types of Home Based Business Insurance
Here are types of insurance that small business owners may need to provide coverage for both your home and home business:
Workers Compensation Insurance – You need workers compensation insurance if you have employees. If you have no employees, you can take out disability insurance for yourself. If you suffer personal injury or illness, disability insurance can help you pay bills while you have no income.
General Liability Insurance: As it may sound, general liability coverage provides broad coverage. According to the Insurance Information Institute, this is one of the most necessary insurance policies – where most claims are made. For example, if you have customers who come to your business and someone is injured, general liability insurance will provide coverage during a customer’s visit. There are default policy limits.
Professional liability insurance: Professional liability insurance also covers injuries to a certain extent. It covers third-party injuries that occur when a customer holds you responsible for damages that occur as a result of your services or products. This is also referred to as error and absenteeism insurance and it is something that almost every business needs. If such claims are made against your company, your legal costs could be astronomical without this type of insurance.
Business car policy: Your personal car policy may not be sufficient to insure a vehicle used for business purposes. Whether or not you should add this insurance depends on the percentage of business use of the vehicle. The percentage determines what the primary use is.
Commercial Property Insurance: This is also known as business personal property insurance. This is necessary if you have business premises that you use outside of your home base. For example, someone who runs a photo studio from home takes a job taking “senior” photos along a bridge — and drops a camera into the water.
Liability for Labor Practices: In terms of business liabilities, this type of insurance is a relative newcomer, but you need it if you have employees. Employment Practices Liability protects small business owners from claims such as wrongful termination and sexual harassment.
Electronic Data Processing – This type of insurance has many names, but any company that processes customers’ information needs it. In short, it helps to provide cover in case you have a data breach. Most general commercial policies provide this coverage, but it is usually limited. This type of insurance can also protect you if you’ve had virus attacks or computer failures that prevented your business from doing business and caused lost revenue.
What is covered by business home insurance?
Let’s face it, paying for various insurance policies is one of the ongoing costs that small business owners have to pay when running a business. You may never use it, but you cannot afford not to have it.
What is covered for home entrepreneurs? Let’s see:Company equipment including office furnitureDamage to company propertyVehicle (if primary use)Data corruption by the companyProfessional liability for products and services
What is not covered by business home insurance?Your personal medical expenses False advertising about the company performed by you Information about your company’s business patents and/or business process secrets Personal vehicle, if used for business
How Much Does Home Based Business Insurance Cost?
There are many variables in many types of businesses. It depends on the types of businesses, the value of businesses’ property and equipment, the business locations and the type of business being conducted.
Here are a few margin numbers. A business owner’s policy with a whole range of coverages can be as low as $30 per month with basic coverage. In other words, as a sole proprietor, your home-based business insurance costs can be less than $500 per year.
How To Get Home Based Insurance For Your Small Business
Start by checking your regular homeowner’s policy to see if you can add an endorsement that provides the coverage you need.
If not, find an insurance agent who specializes in home business insurance. Let an experienced agent be responsible for doing the investigation. You may find an experienced broker a money-saving option to combine ALL of your insurance policies under one umbrella.
How can I protect my home business?
Make a list of risks that could affect your home business. Then tailor those potential risks to a type of coverage that would negate them.
What is the difference between business insurance and home insurance?
Homeowners insurance does just that: protect your home and its contents. It can also relate to outdoor structures such as garages and sheds.
Home business insurance covers business activities, including equipment, professional indemnity, business use of a vehicle, data breaches/computer failure and more.
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