Insurance and Home Based Business

How do you protect your home business from risk? People who run a business from their home may not know what kind of insurance is needed. Small Business Trends spoke with Gary Capone, Vice President of Field Services, Franklin Mutual Insurance, about 10 things you probably didn’t know (but should) about insurance and your home based business.

Home Based Business Insurance Facts

Your Homeowner’s Coverage Isn’t Enough

“Homeowner policies give almost no coverage for your business,”  Capone says, “and this is something that most people don’t realize.”  He says there’s usually no liability coverage under a homeowner’s policy and very limited contents coverage for your business.

You Can Have Off Premises Exposures

Your liability with a home business can extend beyond your front door. For example, it’s common to run a hair salon in your house. However, if someone has a reaction to the dyes you use after they leave, you can be held responsible. Same as any other shop.

You Can Get What the Big Guys Get

Many small business owners who work from home don’t know they qualify for the same coverage as bigger places.

“A commercial policy even has options like accounts receivable coverage,” Capone explains.

You Need Coverage When the Business isn’t Under Your Roof

If you’re just fixing cars in the garage part time, you can be held liable. What’s more, separate structures on your property that you use for business have no coverage at all without a business policy.

Renting the Home? You Should Still have this Insurance

Even if you’re renting the house, you need to be sure your business is covered entirely. These policies cover items like printers and computers even if you don’t own the place.

Take a Bad Bill? A Business Policy can Cover You

Business polices cover more than just the tools of your trade.

“Even a forgery or counterfeit money you’ve collected would be picked up under a business policy,” Capone says.

Lost Income Gets Covered

If you ‘re covered and something like a fire ravages your house, the policy covers lost income and additional expenses until you’re up and running again. A home based business insurance policy makes sure you can make a living even after a disaster.   Make sure you endorse this aspect.

Advertising Injury is Covered Too

This is another coverage resting under the umbrella of what’s good for any business. However, it’s good to have this for a home based business to cover you for libel, slander , copyright infringement and such. It’s perfect for those creative types working on the internet.

Online Issues are on the Radar

Worried about protecting customer contact information and other important data in cyberspace? The chances are your insurance company now has something to cover you.

“It’a a new area,” Capone says. ” A lot of insurance companies are getting into it.”

Your Overall Exposure can be Bigger than you Think

Even if you’re only working from home part time, you’re probably wide open for some kind of liability    Capone concludes by stressing what these small business owners don’t know, can hurt them.

“It doesn’t matter what kind of home based business it is, everybody has exposure ,” he says.