Insuring Your Home-Based Business

For many business owners and budding entrepreneurs, starting a home-based business has a lot of perks, like being able to make your own hours and saving money on renting a work space. There are so many factors that go into maintaining a successful business that insuring it often gets ignored. You might be surprised to learn that your home insurance doesn’t necessarily cover your home-based business. Whether you have clients coming into your home, or keep business related inventory, it’s important to ask your insurance agent about additional coverage. Here’s what you need to know when it comes to finding the right insurance for your home business:

Types of Insurance Policies and Endorsements

1. Add on Endorsements
For businesses that aren’t likely to experience great business related threats, an add-on policy to an existing homeowner or renter’s insurance could be the best option. This add-on policy is relatively inexpensive, and gives good coverage for small businesses who use their home office mostly for administrative purposes. Add on policies will protect your business in cases of fires or other natural disasters, but could leave you uncovered for other liabilities, like an injured employee or damage to expensive business equipment.

2. In-Home Business Policy
If your business includes clients and customers coming in and out of your home, or if you use expensive equipment to operate your business, an in-home business policy will give you the coverage you need. Most policies of this kind cover injuries for both customers and employees, in addition to various types of theft. These policies can cover up to $10,000 in losses and damages.

3. Liability Insurance
There are different types of liability policies that include coverage for both products and injuries that have occurred at your home-based business. If your business makes and sells products inside of your home, those goods won’t be covered by your homeowner or renter’s insurance. If you conduct high volume traffic or production of goods inside of your home, your business might be at a high risk for loss and may benefit from additional liability insurance.

4. Business Owner’s Policy
If your business needs comprehensive coverage, a business owner’s policy will usually provide coverage for almost all scenarios—theft, injury, malpractice lawsuits, and damage to business related equipment. For business owners who use expensive equipment like professional cameras, or factory level equipment, a business owner’s policy will offer the best coverage. While you will pay more upfront, your coverage could be worth millions, depending on your needs.

Other Coverages

There are certain circumstances that would require additional specialized coverage. Make sure to talk to your insurance agent if any of these items pertain to your home-based business:
• You have a company vehicle that’s being used by more than one employee
• If you have multiple employees you should look into Worker’s Compensation Insurance.
• Commercial crime insurance protects businesses from theft and fraud.

There are a lot of aspects of owning a home-based business that can and should be covered by insurance. If you’re ready for an insurance upgrade, Cincinnatus Insurance is here to help.