Insuring a Home Based Business

Will your Homeowner's insurance policy cover your Home based business?

   In a word, NO! Homeowners insurance was never designed to cover business risks. There is a cap on most home policies, limiting the amount of coverage on computers, tools and office furniture- desks, filing cabinets and such. Your home policy will not provide any type of Liability for your business. Most carriers will ask if there is a home-based business on the application. If there is, they will exclude it - in writing.

   There are said to be over 38 million in the US alone. These at home businesses bring in over $400 billion per year now. 
   If you are one of these at home business owners, you need to be aware of how protect yourself and your business. There are many pieces to the commercial insurance puzzle. They may or may not all apply to you. But you must make sure. Being improperly insured is a risk you cannot afford to take with your business.
1. Business Property Insurance will cover your electronics, office furniture, printer and such. Many policies offer the choice between Actual Cash Value (ACV) or Replacement Cost (RC). The difference  is ACV will take depreciation off of the value of the item. RC will pay out what it costs to actually replace the item today. ACV will be a lower premium, but you will pay much more in the case of a loss and you have to replace your items.
2. Liability will cover you if you are found liable for damages to someone or their property. If you have anyone- customers, vendors or even delivery people- come to your home to conduct business, you need Liability coverage. Your Homeowner's liability will not cover this.
3. Professional Liability or Acts coverage will cover you against any negligence claims made by clients. This is very important for any one providing service or professional advice.
4. Product Liability covers you if you are liable for damages caused by a product you designed, manufactured or supplied.
5. Business Auto will cover you in the case of a claim for your auto while being used for business. Your personal auto policy will not cover claims caused during the course of doing business.

Some companies are beginning to offer some of these coverages as endorsements onto Homeowners policies. Others offer both the Home and the business insurance as a package. Call your agent (that is what we are here for!) and make sure you put the right policy with the right coverage in place for your Home based business.

Thanks for reading!
Nancy Brockman

Please call us with any questions or quoting needs!   toll free 877-987-8683 or click:

The Brockman Agency