Home-Based Business Insurance
If you’re working at home – STOP – and review your insurance coverage.Your homeowners insurance probably doesn’t cover your existing business. A typical homeowners policy provides between $2,000 and $5,000 coverage for business equipment while in your home. Usually this isn’t enough to cover all of the business property. In addition, you will likely need coverage for liability and business interruption.
At-home businesses are continuing to grow as more and more people turn to entrepreneurship.This video clip features Bruce Croxon, formerly of Dragon’s Den, talking about the rise of entrepreneurship in Canada.
There are three choices available when insuring your home business —1) endorsements to the homeowners policy, 2) an in-home business policy or 3) a small business owner’s package policy.
Depending on the type of business you operate, you may be able to add an endorsement to your existing homeowner’s policy which doubles the standard limits for business equipment. Some insurance companies have begun offering endorsements that include property and limited business liability coverage. Endorsements are typically only available for businesses that generate less than $5,000 gross sales annually.
In-Home Business Policy
The insurance industry has responded to the growing number of home-based businesses by creating in-home business insurance policies. For about $250 per year you can insure your business property for $25,000. General liability coverage is also included in this policy. A business owner can also purchase from $500,000 to $2 million worth of liability coverage. If your business is unable to operate because of damage to your home, your in-home business policy will cover lost income and ongoing expenses such as payroll for up to one year. The policy often provides limited coverage for loss of valuable papers and records, accounts receivable, off-site business property and use of equipment.
Business Owners Package Policy
Created specifically for small businesses, this policy is an excellent solution if your home-based business operates in more than one-location or manufactures products outside the workplace.
Some home-based businesses violate the conditions of your homeowner’s policy. To get insurance coverage that won’t overlap, conflict or leave you exposed, please check with us.
One final note: If you are using your automobile for business activities – transporting supplies or products or visiting customers – you should make certain your automobile insurance protects you from accidents while you are on business.
(Copyright: Staying in Touch 2000 – Volume Ten, Number Two)