Insurance Home Business Options

Insurance home business cover for your home based business.

Many home based business owners make the mistake of thinking that their existing homeowners insurance covers their home business. This is inaccurate. Typically a homeowners policy will only cover damages and loss of up to $2500 on the premises and do not cover any liability arising from your home business activities. Find out what type of home business insurance your particular home business activities require. Go to Home Based Business Insurance.

Once you have determined the risks your home business faces and prioritized your insurance needs it is time to look for good home based business insurance packages. There are a number of options for purchasing home business insurance and a choice of affordable and flexible products to suit your particular needs. The type of policy you choose depends on the size of your business, the type of business activities you are engaged in and the extent of your exposure to potential liability. Many insurance companies offer home business insurance packages that bundle diferent types of insurance cover together.

• Business Owners Package Policy The most inclusive type of insurance package is a Business Owner's Policy (BOP). Many insurance companies have specialized BOPs that are comprehensive but priced to suit the home business or home office market. The BOP includes both property damage and liability coverage. Typically this includes loss of property, data, records and income, theft and general liability against claims for injury or damage sustained by a business-related visitor to your premises or through the use of your services or product. Your home structure is also covered and some off site coverage is provided. Typically this sort of insurance package would benefit a home business that stocks inventory or manufactures products or those business activities that have a risk for professional liability.
• Home Office Policy A level below this policy is the Home Office Policy or In-Home Business Policy. Home insurance and business insurance is combined in one policy designed specifically for home based businesses. This kind of insurance home business cover is adequate for a mid-level home business with a few visitors each week and quality business equipment. It covers loss or damage of business property, general business liability, replacement of lost income and ongoing expenses if your business cannot operate out of your home due to damages to the premises. It provides some coverage for loss of data, accounts receivable and off site business property.
• Home Insurance Endorsement or Incidental Business Endorsement Depending on what type of home based business you have you can usually purchase an endorsement on your existing homeowners policy that gives you a higher limit on damage, loss or theft of contents. For a fairly minimal amount - from about $25 per annum - you can double your standard policy limits for business equipment from $2500 to $5000. Some insurers allow you to raise the limit to as much as $10 000. Generally this is the least expensive insurance home business option but is also provides the least amount of coverage and could leave you exposed to a great deal of risk. It is important if you choose this option that you know exactly what the endorsement includes and what it excludes. Some companies do offer endorsements that include limited liability coverage but it may be insufficient for your business depending on your potential liability exposure. For example a home business that provides food, beauty treatments or professional advice has a far higher risk of liability claims than a home business that makes greeting cards. An endorsement on a home insurance policy may be adequate if your home business has minimal equipment and no business-related visitors to your premises.

Tips for Purchasing Home Business Insurance

• Do your research Shop around before purchasing an insurance home business policy. Do your research and get quotes from several different companies. The first step is to find a reliable insurance agent or broker who specializes in business insurance and is a member of one of the professional insurance broker's associations. The agent or broker should do their own initial analysis of your exposure and review your present coverage.
• Get group rates through a professional or business organization A number of business organizations offer insurance plans or access to a group rate for their members. Professional organizations exist for virtually every business occupation and these organizations may also offer reduced rates on home business insurance. General business organizations such as your local Chamber of Commerce and the Better Business Bureau also offer discounts on business insurance. Investigate the cost of business insurance if purchased through an organization related to your home based business and weigh up any savings and benefits against the cost of your group membership.

Find out more about Home Business Insurance

In order for any business to be successful it should be run like a business even if it operates from your home. A key element in business success is the ability to minimize your risks. Insurance home business policies can do this for you.

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