I know many of you may run a small business from your home, so I thought I would venture into the world of insurance for your small business. Many people start a side-hustle from their home office just to bring in some extra money, and before you know it they are running a large scale operation with many assets to protect. If you own a home office and are contemplating whether or not you need home office insurance then this article will give you the answer you need.
Saying that home office insurance is not a necessity because your homeowners insurance policy will cover your home business is a bit short-sighted. A typical homeowners insurance policy will limit business property losses to sums around only $2,500 and will not even include losses outside the home or any liability connected with the business. The Independent Insurance Agents and Brokers of America say that at least 60% of home businesses are not properly insured. Consider the source, but if only 30% aren’t properly insured, then it’s too many, isn’t it?
Unless your home business is of equal to or lesser value than that of what your homeowners insurance policy says it covers, you need to seriously consider home office insurance. Among the most popular coverages are the In-Home Business Policy and the Business Owner’s Policy or BOP.
- The Business Owner’s Policy (BOP), which is the most common for small business owners and is unique because a BOP can fit your specific needs through adding extra coverage based on your necessities. However, this policy is only available to small businesses that meet a pre-designated criteria and will vary depending on the type of business you have and what extra coverage you will require.
- The In-Home Business Policy will typically provide more coverage for your business-related equipment and liability than that of a standard homeowner’s policy. It will protect off site properties and some in-home business policies will even cover your losses in the event that your home office is damaged to the point that you are no longer able to work in it.
Here is a list of a few items that a home business owner must consider when deciding upon coverage: inventory, money, buildings, machinery, records and other valuable papers, and computers.
You may not think that operating a home office will carry a greater liability than just simply living in the house, but surely your insurance carrier may have a different opinion. So when faced with the question, “Do I need home office insurance?”, the most important thing to do is to weigh your decision based upon what you value your business to be and consult your insurance carrier accordingly.
Remember, a good business owner should never take a gamble on his or her property and risk the loss of valuable assets and clients, so make sure that you have the right coverage in place and your business as well as your livelihood will thrive.
(photo: Travis Isaacs)