Home Business Insurance: Explanation Of Home Business Insurance

Your home-based business is not sufficiently insured under your home insurance, contrary to common belief. If you do business in your home and have your business equipment and products in your home, you need home business insurance. Surprisingly, more than half of the home-based business owners in the U.S. are drastically underinsured.

You are running a home-based business if you make money for performing a service or making a product, pay yourself or employees, and use a part of your house solely for conducting these activities. This means you are involved in a home-based business and you need to invest in home business insurance.

Most homeowner insurance policies will only cover damages to your business equipment for up to a nominal $2,500 and a measly $250 offsite. If you were to tally up what it would cost to replace your business equipment, you know you would probably need a lot more than $2,500. Also, homeowner insurance will not cover your liability if a client or delivery person were to slip and fall on your premises while acting in a professional capacity.

A home business insurance policy usually comes in the form of an endorsement on your homeowners insurance and is very affordable. A standard home business insurance endorsement can start at about $14 per year and can increase your damages indemnity up to $5,000 and give you liability coverage of $300,000. If you buy a policy with a premium of about $250 per year, you can increase your business personal property damage coverage to $100,000 and your liability coverage to $1,000,000.

If your home-based business gets a little bigger and you actually have to hire employees to help you manufacture your widgets, then you are going to have bigger and more complex insurance requirements. There are many options you can add to your home business insurance policy to cover your business’s increased property and responsibilities.

Home Business Insurance: Explanation Of Home Business Insurance

Home business insurance can be available at a discount if you belong to a professional association. Many groups offer insurance coverage to its members at a very low rate because they qualify for a group discounts.

Home-based business is a rapidly-growing industry as a response to the economic hardships so many Americans have faced in recent years. If you, too, are considering starting a home-based business, make sure you cover yourself for any damages or liabilities that may occur. One incident can ruin your business before it even has a chance to get off the ground.

Home Business Insurance: What Does Home Business Insurance Cover?

What happens if your house is burned down by a fire or demolished by a tornado? All of your business’s physical assets can be destroyed. Home-based businesses usually run on very tight budgets because their profits are usually small. There are also a wide variety of other losses that aren’t physical but can be just as devastating to a business.

For example, let’s say you are a craftsman and you make homemade furniture in your garage. Imagine if your electric wood planer shorts out and starts a fire that destroys the entire contents of your garage. You can be faced with a myriad of expenses and even lawsuits due to this one incident. Your home business insurance can financially protect you and your business and get you back up and running by covering you for:

  • Replacing or repairing your garage and damaged equipment.
  • Liability for injury to any employees or clients, and even death.
  • Liability for damage to other people’s property that was onsite and damaged by the fire.
  • The replacement of your documents and accounts receivables.
  • The cost to set up in a temporary location.
  • The possible extra expenses incurred from operating in your temporary shop.
  • Lost income for covering expenses, including utilities and payroll.

Home business insurance will also help you replace stolen business equipment. If your home is broken in to and the thief steals all of your computer equipment, it will probably be devastating to your company to try and replace it on your own. Through your home business insurance policy you will be able to quickly replace your computer equipment and get back to work. You can even be covered if you are away from your home and someone steals your personal digital assistant, a.k.a. PDA, while you are in a restaurant, in France, conducting business with a client.

Your home business insurance can protect you from other circumstances including:

  • Vehicle damage or liability for any incident involving your business vehicle onsite and offsite.
  • Loss of income due to fraudulent behavior by clients, credit card or identity theft, uncollected accounts receivables, and destroyed money or checks.
  • Incidents arising from co-ownership of the premises, leased land and equipment, franchising, your product vendors.
  • Losses due to terrorist activity in your neighborhood.

Your home-based business faces the same risks any other type of business faces. Make sure you, too, are financially prepared.

Home Business Insurance: Who Needs Home Business Insurance?

Home Business Insurance: What Does Home Business Insurance Cover?

Do you make money at home as a blogger? Or do you have your own clothing line you manufacture and distribute from your basement? Both of these home-based businesses, and many more, should have sufficient home business insurance to financially cover your business from damages and liabilities.

In recent years there has been explosive growth in home-based businesses and the variety of businesses has expanded right along with it.

Artists and craftspeople commonly make and even sell their wares from their homes. If you are an artist who also sells his product at craft shows, you can increase your coverage to include incidents that may occur at the hall or festival. The artist profession includes painters, writers, jewelry-makers, furniture craftsmen, calligraphers and interior designers, and many other money-making creators.

Do you perform repairs at your home? If you are a seamstress and you make and mend clothing in your home for a living, then you need home business insurance to cover any damages to your clients clothes or any liabilities from a client being injured while on your premises. Other repair businesses include shoes and other leather goods, musical instruments, furniture, vehicles, computers, televisions, clocks and watches and any other object that can be repaired from your home.

If you run your catering company from your home, you need to be covered for a wide variety of food-related liabilities in addition to the standard issues that arise in a home-based business. Catering can include wedding cakes and other baked goods, candy, and even full-course meals for functions held at entertainment venues.

When you run your business from your home but conduct most of your business away from home, you still should have home business insurance. You can be covered for any incidents that occur at your job site and for the equipment and documents you store in your home. Some good examples of this type of home-based career are photographer, disc jockey, professional speaker, model, magician and auctioneer.

Home-based high-tech businesses can be sued for damage and liability circumstances unique to their industry. If you build and sell software from your home you could inadvertently send a client a disc with a virus, which, in turn, can infect and destroy your client’s computer and even his entire network.

The list of home-based businesses continues to grow and as it becomes a more commonplace way to do business, your chances of being sued also increase.

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