Are You Covering Your Home Based Business With Homeowners Insurance? Many home based business owners rely upon their normal home insurance policy to cover their business assets.
Sometimes, this will be ok, but very often, this is a big mistake.
To understand why it could be a mistake, please take a moment to learn about typical homeowners policies.
Personal Property vs.
Business Property The first problem that usually crops up is that the typical home policy does not have enough personal property coverage.
A home based business may add supplies, equipment, computers, inventory, and records to the normal personal property in the home.
Combine this with the furniture, TV sets, and appliances in that same home.
Whatever coverage you and your agent thought was enough before you ran you home based business may be woefully inadequate now! Also be sure that your personal property is covered at the replacement costs, and not the real value.
If your property is covered at real value, you will have to accept garage sale prices if your precious items are damaged.
You laptop may cost $1,200 to replace, but would be unlikely to fetch more than a couple of hundred dollars if you sold it on eBay.
You do not want to have to replace your business items that way.
Do you even know how much personal property coverage you have in your own policy? Lots of homeowners have no idea.
It is time to dig out your policy or call your agent or insurance company to find out.
Home vs.
Business Liability Insurance Typically, a home policy covers the home owner in case a visitor makes a claim for damages while they are visiting.
This may not cover damages that happen in the course of business.
Your normal policy will not contain professional or business liability coverage at all.
Personal vs.
Commercial Car Insurance Another coverage issue that many small business owners forget about is coverage for their cars.
Personal auto insurance policies may not be adequate if you use your own car for business quite a bit.
This can be especially true if you let employees drive it, carry inventory, or drive a lot more than you originally stated when you bought your policy.
How Can You Find Adequate Home Based Business Insurance? It is no time to fret but just to take some action! It may be very simple to fix the problem with your homeowners and home based business insurance.
Here are some of the solutions you may find.
But if you ignore the issue you run the risk of having big financial problems if some essential business supplies are damaged or a customer claims damages.
Sometimes, this will be ok, but very often, this is a big mistake.
To understand why it could be a mistake, please take a moment to learn about typical homeowners policies.
Personal Property vs.
Business Property The first problem that usually crops up is that the typical home policy does not have enough personal property coverage.
A home based business may add supplies, equipment, computers, inventory, and records to the normal personal property in the home.
Combine this with the furniture, TV sets, and appliances in that same home.
Whatever coverage you and your agent thought was enough before you ran you home based business may be woefully inadequate now! Also be sure that your personal property is covered at the replacement costs, and not the real value.
If your property is covered at real value, you will have to accept garage sale prices if your precious items are damaged.
You laptop may cost $1,200 to replace, but would be unlikely to fetch more than a couple of hundred dollars if you sold it on eBay.
You do not want to have to replace your business items that way.
Do you even know how much personal property coverage you have in your own policy? Lots of homeowners have no idea.
It is time to dig out your policy or call your agent or insurance company to find out.
Home vs.
Business Liability Insurance Typically, a home policy covers the home owner in case a visitor makes a claim for damages while they are visiting.
This may not cover damages that happen in the course of business.
Your normal policy will not contain professional or business liability coverage at all.
Personal vs.
Commercial Car Insurance Another coverage issue that many small business owners forget about is coverage for their cars.
Personal auto insurance policies may not be adequate if you use your own car for business quite a bit.
This can be especially true if you let employees drive it, carry inventory, or drive a lot more than you originally stated when you bought your policy.
How Can You Find Adequate Home Based Business Insurance? It is no time to fret but just to take some action! It may be very simple to fix the problem with your homeowners and home based business insurance.
Here are some of the solutions you may find.
- If your business if fairly small, your insurer may be able to adjust your policy to cover business items by adding a rider.
This is probably a simple and fairly affordable solution. - Business Owners Policies (BOP) are insurance packages that many small businesses purchase.
They contain a package of coverage that are typically adequate.
If your business is a bit larger, this may be the solution you need. - You may also be able to adjust your car insurance policy to cover some business use.
If not, you may need to purchase a commercial vehicle policy.
But if you ignore the issue you run the risk of having big financial problems if some essential business supplies are damaged or a customer claims damages.
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