One in eight homes run some type of home-based business, but only 40% carry any type of in-home business insurance. Possibly it’s because entrepreneurs are under the impression that their homeowner’s policy will cover their business – unfortunately, this isn’t always correct.
If you sell goods or services to other people from a home base, regardless of the amount of revenue you generate; you are exposed to financial risks and have liabilities. If you sell cookies and someone gets sick, if you are a wedding photographer and forget to turn on the flash, if the UPS person slips on your sidewalk, if you warehouse inventory or secure data; these are just some of the types of situations which can place your financial future at risk.
What to check before you add coverage:
- Read your current homeowners/renters insurance policy to determine what is and isn’t covered.
- Determine if your current policy restricts coverage in this area or considers a home-based business a violation of the policy terms.
As an entrepreneur, how can you protect your home-based business? Contact your NEC professional insurance agent to help you determine which type of coverage is best for you and your business.
- Rider to a homeowner’s or renter’s insurance policy: This expands your homeowner’s or renter’s policy and is typically the least expensive type of insurance, but also offers less protection.
- In-home business policy: Typically covers a broader spectrum of contingencies and may cover up to three employees and $10,000 in losses. Typically also covers business equipment and liability for injury.
- Business owner’s policy: If you need more than $10,000 of coverage this is the type of policy brick-and-mortar businesses use. Circumstances usually covered by this type of plan include damage or loss of equipment and assets, injuries, loss of data, professional liability claims, loss of income, as well as possible protection when driving your personal vehicle for business purposes.
As your business grows, you may need additional coverage not included in a business owner’s policy such as life insurance, workers’ comp, and business-vehicle insurance. But for most small businesses, the business owner’s policy can provide a safe place to start.
NEC is one of the largest independent insurance brokers in Missouri offering business insurance, personal insurance, risk prevention, and financial services. Contact us today for more information at 636.271.2481 or visit NECins.com.