Home Business Insurance

Home business insurance is often neglected. Many home based business owners think it is not necessary to purchase additional insurance to their home insurance, assuming that this also covers any business activities in the home.

The reality is that homeowners policies were not designed to cover the business use of the home. In fact certain home based business activities can impact negatively on your home insurance even making it invalid. This is because you are using your home for activities that the insurer does not know about. The kinds of home business insurance that you require depends on the type of home based business activities you are engaging in.

Here is an explanation of the most common types of insurance that typically apply to home based businesses.

• Contents or Property Insurance Home business owners should have contents insurance for their business property in addition to their existing home insurance cover for damage to, loss and theft of household property. This specifically covers your business-related property including equipment and inventory. Most homeowner's policies have a limit for claims for business property on the premises of about $2500. Depending on your business this amount is unlikely to cover the replacement cost of all the business equipment you use to operate your business. In addition your equipment will only be covered by your homeowner's policy while it is on the premises. If you take equipment, such as a laptop computer or cell phone, off the premises when you visit clients you will need a separate contents insurance for it.
• Liability Insurance This covers home based businesses for accidents that happen in the course of your business activities on your premises. Typically homeowners policies provide no coverage whatsoever for legal liability resulting from your business. If a visiting customer slips in your home and injures themselves in any way your homeowners policy will not cover it. General liability insurance will cover medical payments and lawsuits resulting from injuries sustained by clients and employees on your business premises and elsewhere. If your home business involves regular visits by customers, clients, delivery people etc it may be necessary to buy business liability insurance. Professional liability insurance will protect you if a client claims to have suffered damages through your professional services. This insurance will protect your personal assets and provide adequate compensation to the client who has suffered the damage.
• Vehicle Insurance If you use your personal vehicle for business activities or your home based business is the owner of a vehicle you will need to have it properly insured for business use. This covers any damage to the vehicle as well as legal liability if you are involved in an accident.

What are the options for purchasing home business insurance? Insurance companies have responded to the increased need for home businesses to purchase coverage with a variety of affordable and flexible products. Find out more at Insurance Home Business

Proper home business insurance is crucial to protecting both your business and your income

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