Many home business owners believe they do not have to purchase business insurance. The belief is that other forms of insurance, such as renters or homeowner's insurance, will cover any losses and provide the home business owner with adequate risk protection. However, your business property will often not be insured by anything other than your business insurance.
Covering Your Equipment
Homeowner's insurance policies will sometimes limit the coverage of business equipment. If so, you will want coverage that can over the replacement of your business equipment in the event of a fire, theft or vandalism. You will likely need this even if you bring equipment home from the office. However, another cheap option is to determine if your homeowner's insurance provides an endorsement for business equipment, which will usually require that you pay a higher premium.
Choosing Between In-Home and Business Insurance
Otherwise, you will need to choose between in-home and business insurance policies. If you need less than $10,000 in assets covered, you will need an in-home insurance policy. If you need more than $10,000 in coverage, you will need a conventional business insurance policy.
Covering Employees or Coworkers
If you have employees or coworkers who frequently visit your home, they may not be covered under your homeowner's insurance policy if they are injured. You will need coverage to pay for medical bills or any other incident that causes losses to the visitor.
Covering Loss of Income and Relocation
When you work from home and there is a fire or other natural disaster that displaces you from your home, the loss of your home is not the only tragedy. Your home-based business will also likely be disrupted. Income and relocation insurance will cover the cost of relocating and will also cover the cost of lost income until you can get back to work.
Covering the Loss of Research and Accounts Receivable
If your business involves research and you have lost the research through a disaster, protection for valuable papers will pay for the replacement or restoration of the lost data. Also, if accounts receivable records are lost and this causes you to lose a portion of your income, accounts receivable insurance will cover this loss.
Coverage for Ad-Related Lawsuits
When you advertise from your home business, you may need protection for advertising injury claims. For example, if you are taken to court because your advertisements are believed to have violated a copyright or have slandered your competition, your advertising insurance will protect you.
Keep these things in mind when considering buying business insurance for your at-home company.