With access to both technology and the internet, more and more people are running businesses out of their homes. But will a homeowner’s insurance policy cover the risks of a home-based business? In nearly every case, the answer is no. Additionally, some policies may give a very limited amount of coverage for business owned property, such as a computer, but nothing else. The bottom line is, nearly all homeowner’s policies clearly exclude business operations. Not having a proper coverage in place can leave you with uninsured exposure. This is why you need separate business insurance to cover your home-based business risks.
Business Liability
Home-based business owners may feel that they do not need coverage because nobody steps foot on their premises. The problem is that liability claims often happen away from the business premises. This can include a number of scenarios, including someone taking action for information found on your website or someone getting injured from the product or service you provide. Most business policies include coverage for personal injury lawsuits. This means you have coverage if someone takes legal action against you for things like libel or slander. Competitors and customers can both sue a business owner for personal injury. A business policy also covers off-premises injury. This includes if any property that you take out in the field injures someone. It will also cover you during trade shows and usually meets the insurance requirements that some trade shows may require.
Business Property
Any business property you may have in your home is usually excluded or has very limited coverage under a homeowners policy. Getting coverage to protect your computers, equipment, furniture, inventory and any other physical assets helps keep your business in operation with minimal disruption and financial loss. A business policy also usually covers loss of income, which is payment for income you did not earn as a result of a covered claim. Policies may also include coverage for things like valuable papers, damage to property of others, property coverage off-premises; any number of things.
Potential Additional Coverage Needs
A business owner’s policy is specifically designed to protect the unique interests and property of a small business owner. This package policy includes nearly all, if not most, of the coverage you need. However, if you are providing some kind of professional advice, consulting, or other non-tangible professional services, you may also need a professional liability policy. Also, if you have any employees, your state law will require you buy Worker’s Compensation insurance. Depending on the type and size of business you own, you may have further insurance needs.
Hoping that your homeowner’s policy is going to cover you in the event of a claim will leave you frustrated if your business experiences a loss. Businesses have a much higher risk than a homeowners policy allows for, and homeowners claims adjusters will quickly deny coverage for business-related claims in the event of a loss. Talk to your favorite insurance agent today to explore your business insurance needs and options.