Insuring Your Home Business
If you work out of your home, you may need additional insurance coverage.
If you operate a business from your home, it's important that you obtain adequate insurance coverage for your business equipment and transactions, just as if you had a separate office. Even a small home enterprise needs full protection against the risks of doing business.
Homeowners' or Renters' Insurance Policies
Do not rely exclusively on your regular homeowners' or renters' policy to protect your home business, at least without checking first with the insurance company. Many of these policies do not cover business use of a home, which means that you probably won't be protected against losses relating to your business. For example:
- After your computer is stolen, you may find out that it's not covered by your homeowner's policy because business property is excluded.
- After your house burns down, you may find that your fire coverage is void because you didn't tell the insurance company that you were using your home for business.
- After a delivery person slips on your front porch and breaks his leg, you may find that you're not covered for injuries associated with business deliveries.
It's easy to avoid these nasty surprises. Sit down with your insurance agent and fully disclose your planned business operations. It's relatively inexpensive to add riders to your homeowner's policy to cover normal business risks.
Replacement Cost
When you talk to your insurance agent and/or review policy provisions, make sure that the policy will pay you the full replacement cost for your business equipment and furnishings -- not the (much lower) value of your used office property.
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