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Figure out how much it would cost to replace your business property after a fire, theft, or other disaster. Don't overlook things such as the specialized business software you run on your computer. Depending on the nature of your home business, replacing equipment and furniture could run you many thousands of dollars.
Ask your insurance agent what it will cost to insure this valuable property, allowing for a good-sized deductible to keep costs down.
Liability Insurance
Your homeowners' or renters' insurance may not adequately protect you from liability to business visitors. Accidents -- such as people getting hurt when they trip and fall -- are more likely to happen at home than in a well-planned office building. Your homeowners' policy probably protects you if you're sued by a social guest or someone at your home for a nonbusiness purpose -- a florist's truck driver delivering flowers or the meter reader who's checking on gas usage, for example.
Most homeowners' policies, however, do not cover injuries to a business associate, employee, customer, or delivery person who is hurt on your property. To cover these risks, you may need a rider to your homeowners' policy or a commercial general liability policy.
Also, think about the extent of your general liability coverage, should you accidentally injure someone or damage property while away from home on business. You may need a rider or special policy to cover this risk.
Certain types of businesses, home-based or not, need special kinds of insurance. If you render professional services, look into professional liability insurance. If you manufacture, distribute, or sell products that may hurt someone, you might consider products liability insurance, and if you have employees, you'll need to provide workers' compensation coverage.
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