Buy Insurance for Home Business

If your home and your business are in the same place, you may be able to cover your business on the same policy that covers your home for some time. But the bigger your business grows, the more you’ll have to protect and the better an insurance policy you’ll need.

The insurance company and the agent for your home policy are the logical ones to start with in scoping out better insurance for your business. They’ll be familiar with the limits of your present policy, and may also give you a better deal than another insurer would.

One place to start for home business coverage is with property protection. Many basic home policies limit business personal property coverage to less than $5000 in the home, and still less for a loss away from home. If you have a web-based business, you may well want more coverage than that.

Also, if you have a business such as child care that involves other people being in your home, they may not be covered by your home policy if they are injured. For those two occasions, higher property and liability risks, you may be able to add riders to your current home insurance policy. It’s easier to add riders for more property coverage than it is for more liability protection. But if you can use riders, this is often a cheaper choice than a separate business insurance policy.

Still, there are some losses that are not covered at all by a home policy. One is business data. If, for instance, you have a business that involves a lot of small transactions and individual records, it may well be worthwhile to protect these data with a business policy.

Another situation you might want to cover is business interruption. If something occurred that caused your business to have to shut down-a hurricane or fire-you would lose income from the business on top of other losses.

A home office or in-home business policy would cover both business data and business interruption, for a fairly small cost.

Home-based and other small businesses often operate in niche markets. Some insurance companies specialize in policies for these specific kinds of risks, and may offer better rates for certain kinds of business customers. You can ask people in those lines of business or your local chamber of commerce to recommend an insurance company or agent who covers those lines.

As your business grows-and especially if you deal in consumer products-you may want to consider yet another type of coverage. This is a business owners policy, which provides broader coverage than an in-home business plan. The owners plan can provide better protection if you have several employees or business locations (say, an office and a warehouse), or if you think you might ever have product liability suits against you. Business owners plans offer more protection, but at a cost that has to be weighed against the scale of your business.

Finally, any business with one or more employees must have workers compensation coverage. Check with your state labor department’s workers comp unit for coverage rules.